European bonds head for worst weekly selloff since March as energy prices soar

U.S. consumer inflation data later on Friday could boost expectations the Federal Reserve will raise rates when it meets next week. The Bank of Japan meets next week as well and is also widely expected to lift borrowing costs.

Bond yields across the Group of 7 biggest economies have risen by the most so far this week since the start of the war in late February. Two-year yields are being hit particularly hard, as investors have rushed to price in a growing chance that policymakers from Tokyo to Washington and Ottawa will lift borrowing costs to ward off a damaging spike in inflation.

Attacks by U.S. and Iranian forces on targets, including tankers, around the Gulf have fanned fears of the conflict widening across the Middle East, while energy shipments through the Strait of Hormuz have slowed to a handful and producers like Saudi Arabia are starting to cut production.