(Bloomberg) -- Treasury yields resumed declines, erasing a portion of last week’s climb, as oil prices tumbled and a consumer survey found that inflation expectations declined.

Rates across the maturity spectrum were lower by at least 5 basis points and as much as 8 basis points shortly after midday in New York. The five-year note’s yield declined nearly 9 basis points to 3.92%. It briefly exceeded 4.09% on Friday, the highest level since Dec. 13, minutes after the December employment report prompted traders to pare bets on how much the Federal Reserve is likely to cut interest rates this year.

Some of those wagers were reinstated Monday. In one case, an options structure anticipating that short-term interest-rate futures will fully price in a quarter-point rate cut in March was added to. As of Monday, the contract prices in about 16 basis points of tightening on March 20, when the Fed is due to announce its second policy decision of the year.

A nearly 5% drop in the US benchmark oil futures contract after price cuts by Saudi Arabia reinforced expectations that inflation will continue slowing. Also Monday, the New York Fed’s monthly consumer survey found declines in expected inflation rates over several time horizons.

While interest-rate strategists at several Wall Street banks said yields had scope to rise further at least in the short term, those at Morgan Stanley recommended buying Treasuries on dips, anticipating further weakness in mixed labor-market data. Also, Treasury Department data released late Friday showed strong investor demand for zero-coupon bonds, which benefit most from declining yields.   

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