Global bond yields rise amid Middle East conflict concerns
Global bond markets ended the week with losses as energy prices increased inflation fears. Investors expect central banks to raise rates sooner than planned.
Major global bond markets are concluding the week with significant losses as escalating conflict in the Middle East fuels fears of renewed inflation and imminent interest rate hikes. The sell-off has been particularly acute in two-year government bonds, which are highly sensitive to shifts in monetary policy expectations.
In the United Kingdom, two-year gilt yields have climbed nearly 40 basis points this week, marking the most substantial one-week increase since August 2024. British borrowing costs reached their highest levels since October on Friday, while Germany saw its two-year yields hit a one-year peak, on track for the largest weekly jump since April 2023.