Global bond selloff keeps 10-year US yield near 5% on oil, rate-hike fears

Key Points:

• U.S. 10-year Treasury yields approached 5% amid a global bond selloff driven by inflation fears linked to oil prices surpassing $100 a barrel and rising expectations of a near-term U.S. interest rate hike.
• Benchmark 10-year yields for G7 economies rose nearly 19 basis points this week, marking their worst weekly selloff since the Middle East war began, with two-year yields increasing the most in major energy-importing countries like Italy and Britain.
• Central banks, including the European Central Bank, have raised rates and signaled persistent price pressures, while U.S. producer price data heightened expectations of a Federal Reserve hike next week.
• Rising government borrowing costs and higher yields are increasing expenses for mortgages, consumer loans, and corporate borrowing, impacting consumers and governments globally.
• Brent crude oil prices surged to a four-month high near $110 a barrel due to Middle East tensions, intensifying inflation concerns and pushing traders to price in a 72% chance of a Fed rate hike next week.