Bond Yields Hit Multi-Decade Highs Amid Oil Price Surge

The global bond market experienced a significant selloff, pushing yields to multi-decade highs. The 30-year Treasury yield rose to its highest level since 2004, and the 10-year yield jumped eight basis points to 5.20%. This move was driven by elevated oil prices, which have rallied over 75% this year, stoking inflation concerns.

An expanded Treasury buyback operation added to the pressure, falling short of investor expectations. Oil prices remained a source of concern, with Brent crude closing at $106.60 a barrel on Friday after US and Iranian negotiators explored a phased deal that could see Tehran reopen the Strait of Hormuz and Washington lift its blockade of Iranian ports.

Asian stocks advanced 0.2%, but strategists warn that oil prices and bond yields will remain key drivers for markets, adding to inflation pressures and expectations for further Federal Reserve interest-rate hikes. Swaps fully price three additional quarter-point hikes over the next year, a prospect that has driven long-term Treasury yields to multi-decade highs.