US-Iran Tensions Spark Global Market Turmoil as Oil Prices Soar

Global markets are in a state of turmoil following the latest escalation of tensions between the US and Iran. The Strait of Hormuz, a critical chokepoint for global oil supplies, has been effectively closed after the US hit an Iranian island, prompting a series of tit-for-tat attacks.

The resulting surge in oil prices, which have spiked by over 10% this week, has sent shockwaves through financial markets. Bond yields are at multi-decade highs, with the UK's 30-year government bond yield reaching its highest level since 1998 and Japan's 10-year bond yield hitting a 30-year high.

Investors are increasingly concerned about inflation, which is being fueled by the soaring energy costs. The renewed US-Iran tensions have made investors more cautious, with Rajeev De Mello of Gama Asset Management saying 'Bond yields were already rising and the renewed US-Iran attacks and their impact on oil prices have made investors more concerned about bonds.'

Markets across Asia are down, with tech firms particularly hard hit due to their reliance on low borrowing rates. The Federal Reserve is set to release key data on jobs and inflation next week, which could determine whether interest rates are hiked at the next meeting in two weeks.