Global Bond Market Experiences Worst Sell-Off Since Global Financial Crisis

The global bond market experienced a significant sell-off on Tuesday, driven by concerns over inflation and rising energy prices. The escalation of tensions between the US and Iran pushed oil prices higher, stoking fears that central banks may hike interest rates to combat inflation.

The heavy selling in bonds led to a surge in government borrowing costs, with the 30-year UK government bond yield reaching its highest level since 1998. Japan's 10-year bond yield also touched a 30-year high of three percent, reflecting worries about plans for massive government spending.

Deutsche Bank's Jim Reid attributed the bond sell-off to the weekend escalation in the Middle East, while Briefing.com's Patrick O'Hare pointed to underlying fears about inflation and government deficits. Wall Street's main stock indices were firmly in the red, with European stocks also ending lower due to rising eurozone inflation.