A sharp global bond market selloff deepened on Monday as investors grew increasingly concerned that rising oil prices and persistent inflation could force central banks to keep interest rates elevated for longer.
Government bond yields climbed across major economies, extending losses in global debt markets and adding pressure on equities as traders reassessed the outlook for monetary policy and economic growth.
The yield on the benchmark US 10-year Treasury note rose to around 4.63%, its highest level in more than a year, while borrowing costs in Europe and Japan also surged as investors pulled money out of bonds.
The selloff was largely driven by renewed inflation fears following a sharp rise in global oil prices amid escalating tensions in the Middle East. Analysts warned that sustained increases in energy costs could complicate central banks’ efforts to ease monetary policy later this year.
European bond markets also witnessed significant volatility, with German Bund and UK gilt yields rising as traders scaled back expectations of interest rate cuts from the European Central Bank and the Bank of England.
The bond market turbulence spilled over into equities, with stock markets across Asia and Europe trading lower as higher yields reduced investor appetite for risk assets.
Investors are increasingly concerned that a combination of resilient inflation, elevated energy prices, and geopolitical instability could slow global growth while keeping financing conditions tight.
Analysts noted that bond yields have also been pushed higher by increased government borrowing needs and concerns over expanding fiscal deficits in several advanced economies.
The stronger US dollar further reflected the defensive mood across financial markets as investors shifted toward safer assets amid growing uncertainty.
Market participants are now closely watching upcoming inflation readings, central bank commentary, and developments in global energy markets for clues on the future direction of interest rates.
