Bond market selloff rumbles on ahead of Trump and Xi talks
TLT•Global bond yields rose as oil moved above $105 a barrel, with the 10-year U.S. Treasury yield touching 5.145% and Japan’s 10-year yield reaching a 30-year high. Treasury Secretary Scott Bessent said Washington and Beijing had reached an initial two-month extension of their trade truce.
1. Yields climb further
Bond yields edged higher in Europe as oil prices moved back above $105 a barrel and investors awaited a meeting between U.S. President Donald Trump and Chinese President Xi Jinping. The 10-year U.S. Treasury yield touched 5.145% in early European trading, a new post-financial-crisis high, while Japan’s 10-year yield reached a 30-year high overnight.
2. Markets under pressure
Global bond markets continued to sell off after concerns about the Iran war and inflation contributed to the sharpest decline in U.S. Treasuries and other benchmark government bonds since last year’s Liberation Day turmoil. World and European share indexes and U.S. stock futures moved lower, while the dollar hovered at a two-month high.
3. Trade truce extension
Treasury Secretary Scott Bessent said Washington and Beijing had reached a deal on an initial two-month extension of their 11-month trade truce. Traders saw nearly a 70% chance of another Federal Reserve rate increase at its October meeting, up from 50% a week earlier.
