Treasuries edged lower and Asian bonds followed as a rally in oil prices fueled inflation concerns and strengthened bets on a Federal Reserve interest-rate hike.
The dollar extended its gains. Yields on the benchmark 10-year Treasury note rose as high as three basis points to 5.02%, the highest level since 2007.
Weighing on sentiment, Brent climbed 1.6% to about $107.30 a barrel as traders weighed risks to Middle East supplies, with a critical Saudi Arabian pipeline still offline after attacks.
Rising oil prices and the selloff in Treasuries sent Asian bonds lower. Elsewhere, Asian stocks slipped 0.6% after chip shares declined globally on Monday following a warning from leading artificial intelligence companies.
US equity-index futures dipped 0.2%, while Europe was set for a tepid open. The surge in oil prices and a hotter-than-estimated US inflation reading last week have heightened concerns ahead of Wednesday’s Fed decision, with traders pricing in a more-than-90% chance of a rate increase.
Fed officials have grown increasingly concerned about stubbornly high inflation, with three policymakers dissenting in favor of a hike at their July meeting.
