Global Bond Selloff Pauses as Oil Prices Fall

A global bond and equity selloff paused on Friday as oil prices retreated from a four-month high. Brent crude hit $109.97 a barrel but then fell by over 3.5% to $103.64. The price surge has raised inflation worries, with central banks potentially tightening policy.

Average bond yields surged globally, led by the U.S. Treasury yield which touched almost three years high at 4.979%. However, it retreated slightly on Friday to 4.94%, helped by falling oil prices. The 30-year yield scaled a 19-year top before falling back.

The August U.S. consumer price data is due later in the day and could make or break the case for a Fed rate hike next week. Analysts expect an 0.2% monthly rise in core CPI, but risks are skewed towards a higher number as PPI data showed some stickiness.