LONDON Dec 15 A selloff in U.S. Treasuries
gathered pace on Thursday, with 10-year bond yields hitting
their highest level since September 2014 as investors positioned
for a faster pace of Federal Reserve rate hikes in 2017.
The yield on 10-year Treasuries soared 11 basis points (bps)
to 2.64 percent and was on track for its biggest
one-day rise since Nov. 9, the day after the U.S. presidential
That rise pushed the gap over benchmark 10-year German
equivalents to its widest level since early 1989, according to
The Fed's decision on Wednesday to hike rates 25 basis
points to 0.5-0.75 percent was well flagged but investors were
taken by surprise when the "dot plots" of members' projections
showed a median of three hikes next year, up from two
Short-dated U.S. Treasury yields also extended rises made
following the Fed's rate announcement.
Two-year Treasury yields rose to 1.30 percent in
European trade on Thursday, their highest level since August
2009, pushing the gap over German peers to its widest since 2000
at 206 bps.
Five-year Treasury yields surged 11 bps to more than
five-year highs at 2.12 percent, while 30-year yields
were up 5 bps at 3.20 percent.
"The bond market's reaction is based on what the dot plots
show," said Investec chief economic Philip Shaw. "But this has
not been a good guide before, so we need to get some
The rise in U.S. bond yields sent the dollar to 14-year
highs against the euro, with the single currency falling as low
(Reporting by Dhara Ranasinghe; editing by John Stonestreet)