(Bloomberg) -- Treasuries fell across the curve and the dollar strengthened against most of its major peers after Federal Reserve Governor Christoper Waller pushed back on bets the US central bank was nearing the end of its hiking cycle, while traders were also on alert for a scheduled appearance by his colleague Lael Brainard.

Benchmark 10-year Treasury yields climbed as much as nine basis points to 3.90% as trading kicked off again after a public holiday Friday, befor moving to around 3.88% in New York morning trading. Waller said the Fed has got a ways to go before its stops hiking and the market got “way out in front” over the unexpected cooling in inflation last week. A gauge of the greenback rose as much as 0.6% before shifting to be up around 0.4% on the day.

“Easier financial conditions risk undoing the Fed’s work to bring inflation sustainably down to target, so it is not surprising to see officials push back a bit,” Goldman Sachs Group Inc. analysts including Isabella Rosenberg wrote in a client note. 

The dollar’s advance comes after a gauge of the currency slid 3.5% last week, its biggest decline since the early days of the pandemic, as traders trimmed bets on aggressive Fed hikes after US inflation was slower in October than economists forecast. Treasury yields also tumbled and stocks surged amid optimism the Fed wouldn’t need to increase rates as much as anticipated. 

US two-year yields -- among the most sensitive to changes in monetary policy -- climbed as much as 10 basis points to 4.43%, after sliding 33 basis points last week. German and UK 10-year yields fell 4 basis points to 2.12% and 4 basis points to 3.31% respectively, paring some of Friday’s advance.  

Fed Speakers

Fed speakers this week are likely to push back on last week’s market reaction as they want to tighten financial conditions, not loosen them, Commonwealth Bank of Australia strategists wrote in a note to clients. The dollar can partly unwind last week’s decline as they were out of proportion to the size of the miss in inflation, they said.

Fed Vice Chair Lael Brainard is set to speak on Monday as part of a week featuring many central bank appearances. US producer price index data are due Tuesday. 

Meanwhile in Asia, Joe Biden and Xi Jinping agreed to a series of goodwill gestures intended to improve ties between their countries after the first in-person meeting between the leaders of the US and China since the pandemic began. The two men met for about three hours on the sidelines of the Group of 20 summit in Bali, Indonesia, greeting each other with a handshake and conciliatory remarks in which they both called for calming tensions.

--With assistance from Ruth Carson, Garfield Reynolds and James Hirai.

(Updates throughout.)

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