Global sovereign bond yields climb as energy prices surge

Government bond yields rose sharply worldwide as higher oil and energy prices squeezed markets. In the United Kingdom, short‑term yields posted the longest run of daily closures above 5% in almost two decades. Germany's 10‑year yield hit its highest level since 2011, while Japan saw its 40‑year yield jump 10 basis points and its 5‑year yield reach a peak not seen since 2000. The United States 30‑year yield approached its 2007 high.

The Bloomberg Global Treasury Index, which tracks investment‑grade sovereign bonds, surged to a 3.68% average yield – the highest since the 2008 financial crisis – and is on track for its biggest monthly loss since March. Analysts warned that further bond sell‑offs could raise concerns over global debt sustainability, push corporate borrowing costs higher and trigger a shift of capital away from equities. "Many of the same forces are at work," said Torsten Slok, chief economist at Apollo Global Management, noting that rising oil prices are creating problems for the Bank of England, the Fed and the European Central Bank.

Central banks in the United States, Japan and the United Kingdom are slated to make key policy decisions next week, adding to market uncertainty.