US-Iran Tensions Spark Global Market Panic

Global markets are in turmoil as tensions between the United States and Iran escalate, causing oil prices to surge. The Strait of Hormuz, a vital shipping route through which about a fifth of global oil passes, has been effectively closed due to the ongoing military action. This has sparked concerns over energy costs and inflation.

The renewed attacks have made investors increasingly worried about bonds, with yields reaching multi-decade highs. The yield on 30-year UK government bonds is at its highest since 1998, while those for 10-year debt are at levels last seen during the global financial crisis of 2007-08. Japan's 10-year bond yield has also reached a 30-year high.

Markets across Asia have taken a hit, with tech firms particularly affected due to their reliance on low borrowing rates to fuel investments. Investors are gearing up for key data releases next week that could determine whether the Federal Reserve hikes interest rates at its next meeting in two weeks. Fed governor Michael Barr has stated that decision-makers should be prepared to hike if inflation stays above 2%.