Overview
- Fighting and attacks in the Middle East this week, including reporting that Houthi forces seized Mokha and open‑source images suggesting fires on Saudi Arabia’s East‑West pipeline, helped lift Brent and WTI above $100 a barrel earlier in the week.
- The oil spike fed into inflation worries and produced a fresh selloff in global bonds with the U.S. 10‑year Treasury yield climbing above 4.9% and the 30‑year yield reaching multi‑year highs.
- Investors reacted poorly to the U.S. Treasury’s enlarged buyback plan, which traders called underwhelming and which failed to stop yields from rising further.
- Markets now put roughly a two‑thirds chance on a Federal Reserve rate increase next week as traders await Friday’s U.S. CPI print for guidance on policy direction.
- Higher oil prices and rising sovereign yields are raising borrowing costs for households and companies, pressuring equities and mortgages and increasing the risk that central banks in major economies will deliver additional rate hikes unless energy or diplomatic tensions ease.