World News
Global bond selloff drives borrowing costs to multi-decade highs
Mounting inflation fears and high public debt loads pushed benchmark yields higher across major economies.
The short version
- Government bond yields spiked across major economies, with UK gilts reaching 2008 highs, German bunds touching 2011 levels, and Japan's 10-year yield topping 3% for the first time since 1996.[CNBC · Associated Press · France 24 · The Guardian]
- US 10-year Treasury yields climbed above 4.81% early Wednesday before easing to 4.77% on Thursday as US government debt surpassed $40 trillion.[Associated Press · France 24 · Associated Press]
- The bond market rout was driven by inflation concerns and heightened energy worries as renewed US-Iran conflict lifted Brent crude to around $95 per barrel.[Associated Press · The Guardian]
- Deutsche Bank economists estimated the gilt yield surge could cut the UK government's fiscal headroom from £26bn to under £14bn, while UK five-year swap rates touched highs unseen since October 2023.[The Guardian · The Guardian]
Key facts
- The German 10-year bund yield rose 4 basis points to 3.375% on Wednesday morning, its highest level since 2011.[CNBC]
- Japan's 10-year government bond yield surpassed 3%, reaching a level not recorded since 1996.[CNBC · Associated Press · France 24]
- The 10-year UK gilt yield jumped to between 5.25% and just below 5.3%, marking its highest point since 2008.[CNBC · The Guardian]
- The US 10-year Treasury yield rose above 4.81% early Wednesday before falling back to 4.77% on Thursday.[Associated Press · Associated Press]
- Total US government debt has crossed $40 trillion amid widespread concerns regarding sovereign debt burdens.[France 24]
- Renewed strikes between the US and Iran stoked energy supply worries, pushing Brent crude to approximately $95 to $95.56 a barrel.[Associated Press · The Guardian]
- UK five-year swap rates climbed above 4.52% on Wednesday, setting a high not seen since October 2023.[The Guardian]
What remains uncertain
- Deutsche Bank economists estimate that UK fiscal headroom ahead of the October 28 budget could shrink from £26bn to below £14bn due to elevated gilt yields.[The Guardian]
Sources
Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.
- Global bond rout gathers pace as inflation fears mountCNBC
- Global bond sell-off intensifies as US-Iran tensions stoke inflation fearsThe Guardian - World
- Asian shares decline after stocks slip on Wall Street, while global bond sell-off intensifiesAssociated Press · Wire: associated-press
- Global bond selloff deepens as US launches fresh attacks on IranFrance 24
- UK mortgage borrowers brace for rate jump amid global bond sell-offThe Guardian - World
- Oil prices edge lower, while Asian shares rise, tracking Wall Street gainsAssociated Press · Wire: associated-press