Oil Price Surge and Higher Bond Yields Send Markets into Volatility

The global markets are experiencing another week of volatility as oil prices surge and bond yields climb. The price of WTI crude has risen by over 3% to $95.77, which is reigniting inflation fears and keeping major central banks on high alert. This increase in oil prices is also putting pressure on the bond market, with 10-year Treasury yields jumping back up above 5.21% on the day.

The combination of higher oil prices and higher bond yields is taking a toll on risk trades, with US futures being dragged lower again. Equities are feeling the pain as well, with S&P 500 futures down 0.5% and tech shares leading declines in Nasdaq futures. In contrast, regional stocks in Europe are keeping steady, but even they are not immune to the broader market's mood.

The Japanese yen is also in focus after Japan's top currency diplomat Mimura reiterated a strong currency alliance with the US. This move pushed USD/JPY down from 157.50 to 156.50 during the session before settling closer to the 157.00 mark currently.