Oil Price Surge Drives Global Bond Selloff and Inflation Concerns

The global bond market experienced a significant selloff in Q3 due to the re-escalation of the US-Iran conflict, which pushed Brent crude oil prices up by +42.0% from their lows at the end of June.

This surge in oil prices led to higher long-end yields and inflation concerns, as noted by Deutsche Bank's Jim Reid.

The report highlights that despite the PCE data surprising on the downside, other inflationary pressures were present, including higher oil prices.

Brent crude oil prices reached $103.53/bbl, while WTI was up to $90.42/bbl, with no single catalyst for these moves.