Treasury Yields Surge Amid Labor Market Surprises

The benchmark 10-year Treasury yield reached 4% following unexpected U.S. labor market strength, which diminished recession fears and reduced rate-cut expectations. Shares in Europe dipped while the U.S. dollar and equities remained robust. Market focus shifted to upcoming U.S. CPI data and geopolitical tensions rose with increased Middle East conflict.

The benchmark 10-year Treasury yield climbed to 4% Monday as robust U.S. labor market data reduced recession fears, prompting a shift away from anticipated rate cuts. This boosted the dollar and equities' initial performance, while markets await Thursday's U.S. CPI data for further direction.

Government bond yields surged following the labor report, with market speculations on a 50-basis-point Fed rate cut substantially diminishing. This increase in yields affected market sectors differently; European bank shares benefited while real estate faltered.

Amid rising geopolitical tensions, including Middle East conflicts, Brent crude oil saw gains. Meanwhile, a strong dollar boosted against the yen, restrained only by Japanese currency officials' interventions. Eurozone bond yields reflected shifts in U.S. economic factors, further complicating the financial landscape.

(With inputs from agencies.)