NEW YORK, May 15 (Reuters) - The yield on the U.S. 10-year Treasury note surged on Tuesday morning to its highest level since July 2011 following a data release showing retail sales increased moderately in April.
The benchmark government yield reached a high of 3.058 percent, blowing through the key psychological level of 3 percent it hit in late April for the first time in four years. The range of 3.03-3.04 percent is also seen by analysts as a key technical level.
The Commerce Department said on Tuesday that retail sales rose 0.3 percent last month, as rising gasoline prices weighed on discretionary spending, but consumer spending appeared on track to accelerate after slowing sharply in the first quarter.
Retail sales offer insight into the growth of U.S. inflation, which drives up Treasury yields as expectations of interest rate hikes rise. (Reporting by Kate Duguid Editing by Chizu Nomiyama)