US 30-Year Treasury yields climbed back to 2002 highs at 5.72% as oil prices surpassed $100 a barrel, reigniting inflation fears and central bank rate hike concerns. The energy-price surge from Middle East conflict pushed Brent crude briefly above $102, extending bond selloffs globally. UK 30-year gilt yields returned to 6% while French yields rose 14 basis points.
Traders see a 25% chance of a Fed rate hike this month, with hikes fully priced by year-end. The term premium on 30-year Treasuries hit its 2011 peak, reflecting heightened demand for long-term bond compensation. A $39 billion 10-year note auction added pressure, testing demand amid ballooning deficits and fiscal concerns.
Strategists cite the 'bond bear market' as a central bank repricing story, with markets balancing attractive yields against persistent oil-driven inflation risks.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing