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US dollar, Treasury yields jump after strong retail sales data

Treasury yields jumped, and the US dollar rallied, on the back of a stronger-than-expected report on US retail sales.

The yield on the benchmark 10-year Treasury note climbed 0.05 percentage point to 2.275 per cent, while the more policy-sensitive two-year yield advanced 0.03 percentage point to 1.35 per cent. Bond yields move in the opposite direction of prices.

In currencies, the dollar extended its gains against several major developed-market currencies. It climbed almost 1 per cent on the yen to Y110.74. The euro slid 0.66 per cent to $1.1702, and the pound dropped 0.83 per cent to $1.2858.

The dollar was already on the rise earlier in the day as investors continued to eye comments from the influential head of the New York Federal Reserve, who said it was his preference to raise interest rates one more time this year.

Gold, which tends to be hurt by a strong strong dollar, was also on its back foot. The precious metal recently fell 1.3 per cent to $1,274 a troy ounce.