Global Bond Sell-Off Deepens As Oil Gains Fuel Rate-Hike Fears

A sell-off in government bonds deepened on Tuesday, pushing borrowing costs higher and weighing on equities as investors worried energy-driven inflation could force central banks to keep rates elevated, according to RTHK. Renewed fighting between the United States and Iran lifted oil prices close to five percent and added to concerns about tighter monetary policy and slower growth. The 30-year UK government bond yield rose to its highest since 1998, Japan's 10-year bond yield hit a 30-year high of three percent, and the 30-year US Treasury yield stood at just under 5.3 percent. Wall Street's main indexes closed lower, with the Dow down 0.8 percent, the Nasdaq off 1 percent and the S&P 500 down 0.7 percent. European stocks also fell after eurozone inflation reached a three-year high of 3.3 percent in August, reinforcing expectations that the European Central Bank will raise interest rates next week. Traders are now awaiting US jobs and consumer price index data ahead of the Federal Reserve's policy meeting on September 16. Data released on Tuesday showed slowing US manufacturing growth and weaker-than-expected job openings figures.