Bond yields rose to record highs again overnight, with US 10 and 30-year bond yields, hitting highs not seen since 2002. European yields also pushed up to record levels, with particular attention being paid to French bonds. Oil prices eased back to US$88/barrel, but this was not enough to calm fears, in the bond market. Red lights are flashing, with record deficits and debt, servicing these monsters is consuming massive portions of Government taxable income. We are amidst a fiscal crisis, triggered by the energy and inflation crisis. The EUR tumbled below 1.1200, levels not seen since the COVID crisis, while the GBP slumped below 1.3200.The stronger reserve added downside pressure to commodity currencies, with the AUD crashing back to 0.6950, while the NZD surrendered 0.5600. The alarm bells from global bond markets are sending warning signals.
