Bond sell-off deepens as oil rises above $108 - ft.com

The sell-off in government bonds deepened as oil prices moved above $108 a barrel, according to FT.com. The two markets are closely linked: rising crude feeds directly into headline inflation, which in turn shapes expectations for central bank policy. When investors anticipate tighter policy for longer, bond prices fall and yields rise — the mechanism behind the sell-off described.

Oil's move above $108 matters because energy costs ripple through transport, manufacturing and household bills. Persistent strength in crude can keep inflation above central bank targets, complicating any pivot toward rate cuts. That is why fixed-income markets often react to energy prices as much as to official data releases.

For observers, the key question is whether this reflects a sustained supply shock or a shorter-term spike. Watch upcoming inflation prints, central bank commentary, and any supply-side response from major producers. Those signals will indicate whether bond yields continue climbing or stabilize.