Global bond sell-off deepens as $100 oil stokes stagflation fears
The yield on German 10-year bonds, seen as the euro area benchmark, crossed 3.5% on Friday for the first time since April 2011.
TL;DR
- Global borrowing costs are under pressure due to soaring energy prices.
- German 10-year government bond yields crossed 3.5% for the first time since April 2011.
- U.S. 10-year note yields surpassed 4.9% for the first time in three years.
- Yields have broadly increased across Asia Pacific markets.
- Oil prices remain around $100 a barrel, with European natural gas futures hitting their highest level since 2022.
- Concerns about stagflation are impacting multiple asset classes.
- Factors contributing to market nervousness include shipping obstructions, lower Saudi oil output, and European Central Bank interest rate hikes.
- France has cut its annual growth forecast for 2026 due to inflation and other economic pressures.
- UK borrowing costs saw a rare decline following better-than-expected economic growth data for July.