$100 Oil Pushes Global Bond Yields Higher Amid Renewed Inflation Concerns

Currency markets were subdued on Thursday as oil prices remained above $100 per barrel, pushing global bond yields higher due to renewed inflation concerns.

The price of Brent crude continued its upward trend after breaching the $100 threshold on Wednesday, with Iran and the US carrying out their biggest wave of attacks on shipping since the war began, threatening further disruption to Middle Eastern energy supplies.

This surge in energy prices led to a rise in global bond yields, with benchmark US 10-year Treasury yields reaching their highest levels since 2023. However, despite this increase, the dollar failed to sustain its earlier gains and eased to 98.73 on the dollar index.

The European Central Bank is expected to raise interest rates for the second time this year on Thursday, signaling its readiness for further tightening if the inflation outlook does not improve. The Bank of Japan is also set to increase its policy rate next week, amid concerns over broader price pressures and yen weakness.