US Iran Strikes Spark Global Bond Selloff, Eurozone Inflation Rises

US military attacks on Iranian targets have triggered a sharp global bond market selloff, with oil prices rising and stock markets falling amid renewed geopolitical tensions. The sell-off is compounded by inflation concerns and mounting government debt, with eurozone inflation also rising, directly affecting European bond yields and borrowing costs.

Byte's take

Geopolitical shocks are the ECB's worst enemy—they drive inflation and borrowing costs up simultaneously. US strikes on Iran spiked global bond yields, raising eurozone refinancing costs and inflation expectations just as policymakers hoped to start cutting rates.