Global bond yields have risen sharply following the escalation of tensions between the US and Iran, reflecting growing market concern over the economic impact of higher energy prices. The sustained increase in energy costs has strengthened expectations of more persistent inflation, raising the risk of a stagflationary backdrop and driving a reassessment of the outlook for monetary policy.
In this video, Lee Hardman, Senior Currency Analyst at MUFG, analyses how these dynamics are influencing global fixed income and foreign exchange markets. He outlines the implications of rising yields for investor risk sentiment and the US dollar, and highlights the more pronounced adjustment in the UK, where gilt yields have increased significantly alongside renewed weakness in sterling. The discussion also considers the role of political uncertainty and fiscal policy credibility in shaping the near-term outlook for UK assets.
Watch the full analysis in the video below.
(This month’s video is hosted on YouTube. This is a one-off and going forward our video publications will continue to be hosted on the MUFG EMEA website.)