Oil Price Surge Sends Global Yields Soaring

Currency markets remained subdued on Thursday as oil prices surged and global bond yields rose to multi-decade highs. The euro held near two-week highs ahead of a likely rate increase from the European Central Bank, while major currencies traded steadily.

The biggest wave of attacks by Iran and the US on shipping since the start of the war has severely impacted energy flows from the Gulf, causing oil futures to remain above $100 a barrel for a second day. Prices of refined fuels such as heating oil and natural gas have also shot higher, further exacerbating inflation concerns.

The European Central Bank is expected to tackle this threat by raising euro zone rates for a second time since the war started in late February. Despite renewed inflation worries, global bond yields have risen to record highs in some countries, but safe-haven flows into the dollar remain elusive.