Global bond selloff deepens as oil surge pushes 10-year Treasury yield to 5.23%

Global bond markets extended their selloff Monday as oil prices surged over 3% to $108.27 per barrel following President Donald Trump's rejection of an Iranian proposal to reopen the Strait of Hormuz, pushing the US 10-year Treasury yield to 5.23% and the 30-year above 5.5%. The policy-sensitive two-year yield rose to 4.92%, while stock futures fell with S&P 500 contracts down 0.33% and Nasdaq 100 futures down 0.44%. The Federal Reserve raised rates earlier this month, and markets now price in two additional quarter-point hikes by January, a sharp reversal from earlier rate-cut expectations. Global yields also climbed, with UK 10-year gilts near 2008 highs at 5.42% and German Bunds at 3.65%, their highest since 2011. Strategists discuss the possibility of the 10-year reaching 6%, which could push real rates above 3.5% and potentially slow the economy significantly.