Bond Sell-Off Deepens Amid Inflation Concerns and Middle East Tensions
A global bond sell-off intensified on Tuesday, driven by concerns over energy-driven inflation and its potential impact on central banks' interest rate decisions. The latest escalation in fighting between the United States and Iran sent oil prices higher, stoking worries that tighter monetary policy could weigh on economic growth.
The yield on 30-year UK government bonds reached its highest level since 1998, while Japan's 10-year government bond yield touched a 30-year high of three per cent. The US Treasury bond stood at 5.27 per cent, not far from levels last seen in 2007.
Eurozone inflation hit a three-year high of 3.3 per cent in August, cementing expectations that the European Central Bank would raise interest rates next week. Traders are now awaiting key economic data ahead of the US Federal Reserve's policy meeting on September 16.