Oil Prices Soar Amid US-Iran Tensions and Disrupted Shipping
Oil prices surged on Tuesday amid concerns over US-Iran talks and the potential disruption to shipping through the Strait of Hormuz. The international benchmark, Brent crude, gained nearly 2% and traded above $107 a barrel, while US West Texas Intermediate crude rose 1.8% to more than $94 a barrel.
The escalation in oil prices has renewed inflation concerns and expectations that the Federal Reserve will raise interest rates again next month. Government bond prices have fallen as a result, pushing yields to multi-year highs.
In Europe, Germany's benchmark 10-year bond yield reached 3.62%, its highest level since June 2009. The US two-year yield has risen even further, climbing by more than 0.57 percentage points this month to nearly 5%.
Australia's central bank raised its key interest rate by 0.25 percentage points to 4.6% on Tuesday, a 15-year high, as rising oil prices fuelled inflation.