U.S. Treasury Yields Spike to Monthly Highs Following Boris Johnson’s Brexit Victory

U.S. Treasury yields rose on Thursday, as government bond prices fell, following news that the United Kingdom and European Union have finalized a draft Brexit deal that will pave the way for Britain’s eventual withdrawal from the bloc.

Yields Rise

The price of U.S. government bonds declined on Thursday, pushing yields higher. The yield on the benchmark 10-year Treasury note peaked at 1.80%, according to CNBC, the highest since Sept. 19. At last check, the 10-year yield was hovering just below 1.76%.

Yields on 30-year Treasury bonds also touched monthly highs, reaching 2.27%.

The 2-year Treasury note yielded as much as 1.64%. It was last seen at 1.60%.

“Fair and Balanced” Brexit Deal Reached

Less than three months after assuming office, British Prime Minister Boris Johnson on Thursday announced “we have a great new Brexit deal” with the European Union. He called on policymakers to back the draft agreement when it’s tabled before Parliament on Saturday.

Jean-Claude Juncker, the European Commission’s President, called the deal “fair and balanced.”

The deal came to fruition following intensive weekend negotiations that saw both sides narrow the gap on several contentious issues, including the status of Ireland’s border after Brexit. EU Council President Donald Tusk said Johnson’s deal accepts “customs checks at the point of entry to Northern Ireland.” The compromise essentially avoids border checks between Northern Ireland and the Republic of Ireland.

With the deal, Johnson was able to do in less than three months what former Prime Minister Theresa May failed to accomplish in three years. But despite receiving the blessing of EU leaders, Johnson must still convince U.K. Parliament to pass the motion. In practice, he’ll need 320 votes, or a simple majority, to pass the Brexit deal. Most Conservatives and independents who left the Tory party are expected to back the deal.