Global Markets Bracing for Higher Oil Prices and Rising Bond Yields

Global markets are bracing for higher oil prices and rising bond yields as investors await possible rate hikes from central banks. The US share market pulled back last week, reflecting concerns about rising bond yields, despite record highs in US and European shares a week ago. Mixed earnings reports also weighed on the Australian share market, which fell around 0.6% for the week.

Bond yields rose further, with some economists attributing it to higher oil prices. The US Treasury announced an operation to buy back more long-term bonds, but experts doubt its effectiveness in stopping rising bond yields. The operation may only provide a temporary fix and could even backfire if the Fed raises interest rates.

The Australian public debt is relatively low compared to the US, but it's still projected to remain at high levels. In Australia, the RBA Deputy Governor Hauser reiterated concerns about inflation, which might lead to another rate hike around November.