LONDON, March 6 (Reuters) – The world’s biggest bond markets were set to end the week nursing heavy losses as concerns that \u200cwar in the Middle East will renew upward pressure on inflation \u200cand force central banks to start hiking interest rates soon.<\/p>\n
Two-year government bonds, the most sensitive \u200bto shifting rate expectations, are feeling the most pain.<\/p>\n
Yields on Britain’s two-year bond or gilt have risen almost 40 basis points (bps) this week, set for the biggest one-week jump since August 2024.<\/p>\n
On Friday, UK borrowing costs hit the highest \u200clevel since October, while \u2060Germany two-year yields hit their highest in a year and were poised for the biggest weekly jump since April 2023.<\/p>\n
Traders \u2060have ramped up bets that the European Central Bank may hike rates as early as May as energy costs have surged, potentially exacerbating price pressures on \u200bother \u200bgoods and services from food to travel.<\/p>\n
“However \u200bthe conflict is resolved, it \u200chas already undermined our previous assumption that energy prices would remain low and stable this year,” said Berenberg chief economist Holger Schmieding.<\/p>\n
Brent crude oil was headed for the sharpest weekly gain since Russia launched its full-scale invasion of Ukraine in February 2022.<\/p>\n
Brent crude futures have surged roughly 17% this \u200cweek.<\/p>\n
The deepest pool of bonds, U.S. Treasuries, have \u200bseen two-year yields have jump 25 bps \u200bthis week, set for the \u200bbiggest weekly jump since last April’s tariff turmoil. The \u200cmoves have been global: Australia’s borrowing costs \u200bhave risen almost \u200b20 bps.<\/p>\n
Yields rise as prices of bonds fall.<\/p>\n
Markets are sensitive following the supply shock that followed the COVID crisis in 2020 and Russia’s \u200binvasion of Ukraine \u200cin 2022 that sent energy prices spiralling and prompted global central \u200bbanks to respond with hefty rat increases.<\/p>\n
(Reporting by Dhara Ranasinghe and \u200bAlun John; Editing by Elisa Martinuzzi)<\/p>\n","protected":false},"excerpt":{"rendered":"LONDON, March 6 (Reuters) – The world’s biggest bond markets were set to end the week nursing heavy…\n","protected":false},"author":2,"featured_media":518165,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,7892,46,204780,44503,10079,19246,204779,204781],"class_list":{"0":"post-518164","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-central-banks","12":"tag-economy","13":"tag-energy-costs","14":"tag-energy-prices","15":"tag-european-central-bank","16":"tag-government-bonds","17":"tag-war-in-the-middle-east","18":"tag-weekly-jump"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/518164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=518164"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/518164\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/518165"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=518164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=518164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=518164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}