Global bond selloff deepens on inflation concerns

A selloff in government bonds of major economies expanded on Tuesday, pushing up sovereign borrowing costs and dragging equity markets lower as investors priced in the possibility that energy-driven inflation could force central banks to raise interest rates further. The US 10-year Treasury yield climbed to its highest level in months, while long-dated yields in Germany and the United Kingdom also rose sharply. Equity markets in the United States and Europe recorded losses as risk appetite faded. The US dollar gained against currencies considered safe havens, including the euro and the yen, while gold prices also advanced. Analysts said volatility in energy markets was likely to keep pressure on bond markets in the near term. Officials at several central banks said they were monitoring the inflation outlook closely and were prepared to tighten monetary policy further if needed, according to the report.