Global Bond Market Sees Significant Selling Pressure Amid US-Iran Tensions

The global bond market is experiencing significant selling pressure as renewed hostilities between the US and Iran push oil prices higher, fueling inflation fears and interest rate hike expectations.

Yields on government bonds in major economies have risen to their highest levels since 2011. The 10-year German Bund yield reached a high of 3.381%, while the 10-year UK gilt yield climbed to 5.268%.

The U.S. Treasury and eurozone government bond yields rose further on Wednesday, following similar moves in Asian bonds. The two-year US Treasury yield increased to 4.410%, its highest level since January 2025, while the 10-year Treasury yield reached 4.812%, its highest since November 2023.

Bond markets are not in a panic mode, but yields have risen due to inflation fears and interest rate hike expectations, said Christian Hantel, portfolio manager at Vontobel.