STORY: Bonds from Tokyo to New York extended losses on Monday...
as rising energy prices from the ongoing Middle East war led to inflation fears...
and drove investor bets on rate hikes from global central banks.
Benchmark 10-year U.S. Treasury yields jumped to their highest since February 2025, having climbed more than 20 basis points last week.
The two-year yield, which is most sensitive to inflation and rates expectations, touched a 14-month top of around 4.1%.
While the 30-year U.S. Treasury yield rose to a one-year high.
The bond selloff came on the back of a climb in oil prices on Monday, with Brent crude futures at $111 a barrel.
That's as efforts to end the Iran war appeared to have stalled following a drone strike at a nuclear power plant in the UAE.
More than two months into the Middle East war, investors are worried about the economic fallout...
as inflationary pressures mount and what that would mean for the global interest rate outlook.
Adding to the selloff was news that Japan's government will likely issue fresh debt...
as part of funding for a planned extra budget to cushion the economic blow from the war...
Yields on the 30-year Japanese government bond jumped more than 10 bps to their highest on record.
The European Central Bank is seen hiking as early as next month and the Bank of England about twice this year.
In Europe, Germany's bund futures and French OAT futures fell about 0.4% and 0.45%, respectively.
UK gilt yields surged last week, hitting their highest in decades.
Pressure has mounted on Prime Minister Keir Starmer to resign over his party's hefty losses in local elections.
