Oil above $100 drives global bond selloff, pushing UK gilt yields to highest since 2007
Brent crude rose 4.7% to $104.87 a barrel on Thursday, fuelling a global bond selloff that pushed UK 10-year gilt yields to 5.527%, their highest since July 2007.
Oil prices drove a global bond selloff on Thursday 8 October. Brent crude was last up 4.7% at $104.87 a barrel and US crude gained 4.6% to $92.30, after attacks on shipping in the Gulf and the Strait of Hormuz. The US 10-year yield was up 2.8 basis points at 5.305% after hitting a 24-year high on Wednesday, and the 30-year yield stood at 5.666%. In London, 10-year gilt yields rose to 5.527%, the highest since July 2007.
Bank of England Governor Andrew Bailey, speaking at a conference in Istanbul organised by Turkey's central bank, said governments needed to show they can repair their public finances.
Whatever the stance of fiscal policy is, it must be credible and directed at stability, and to be seen to be such by markets.
European shares closed lower as the pan-European STOXX 600 fell 0.8% to a nearly four-month low and European banks dropped 2%. France's CAC 40 fell 0.5% to a more-than-6-month low, with the country's budget deficit exceeding 5% of GDP. Separately, Taiwan's finance ministry said September exports rose 60.9% from a year earlier to $87.22 billion, a record monthly level, driven by demand for AI chips.
