UK Bond Yields Hit Multi-Decade Highs Amid Oil Price Surge
UK bond yields are hitting multi-decade highs while US 30-year yields top 5.36% and oil prices close at levels unseen since 2014, driven by Strait of Hormuz risks and strong producer inflation. These tightening financial conditions have increased expectations for a Fed rate hike to 70%, causing gold to break below key support and fall 2%.
Per new data from GN auto markets/bonds, US 30-year Treasury yields have spiked to 5.366%, their highest level since 2004, as WTI crude closes at its highest point since 2014. This divergence between long-term yields and the flat Fed funds rate has pushed the probability of a rate hike next week to 70%, dragging gold futures down 2% to $4,358.50.
Source: GN auto markets/bonds: treasury yieldsAccording to GN auto markets/bonds: bond yields, Brent crude briefly touched $109.97 as geopolitical tensions near the Strait of Hormuz intensified, a spike that has pushed US 10-year Treasury yields toward the 5% mark and weighed on equity valuations. The report notes that this rate-driven pressure has also hit gold, which remains near $4,317 despite recent geopolitical fears, highlighting that rising discount rates are currently the dominant force in asset pricing.
Source: GN auto markets/bonds: bond yieldsBrent crude trades above $105, driving UK 30-year yields to 5.94% and threatening to erase the Chancellor's remaining fiscal space before the upcoming Budget.
Source: GN auto markets/bonds: bond market
