Bond Markets Hit by Oil Shock

Matthew Diczok, head of fixed income strategy, Merrill and Bank of America Private Bank said the market doesn't expect their to be a sustained increase in energy. he world’s bond markets were whipsawed by unusual volatility as investors rushed to bet on higher interest rates after key central banks signaled fresh concern the surge in oil prices will deliver an inflation shock. Three weeks into the war in Iran, the fallout unleashed a major repricing of short-term bonds during much of Thursday’s trading day by dashing once widespread expectations that central banks would cut rates this year to spur growth.  The selloff was led by the UK, where the surge in yields held echoes of 2022, when former Prime Minister Liz Truss’ fiscal plans sent the market into a tailspin. The two-year rate jumped as much as 40 basis points to 4.49% after the Bank of England on Thursday said it “stands ready” to act to prevent inflation from accelerating. -------- Watch Bloomberg Radio LIVE on YouTube Weekdays 7am-6pm ET WATCH HERE: http://bit.ly/3vTiACF Follow us on X: https://twitter.com/BloombergRadio Subscribe to our Podcasts: Bloomberg Daybreak: http://bit.ly/3DWYoAN Bloomberg Surveillance: http://bit.ly/3OPtReI Bloomberg Intelligence: http://bit.ly/3YrBfOi Balance of Power: http://bit.ly/3OO8eLC Bloomberg Businessweek: http://bit.ly/3IPl60i Listen on Apple CarPlay and Android Auto with the Bloomberg Business app: Apple CarPlay: https://apple.co/486mghI Android Auto: https://bit.ly/49benZy Visit our YouTube channels: Bloomberg Podcasts: https://www.youtube.com/bloombergpodcasts Bloomberg Television: https://www.youtube.com/@markets Bloomberg Originals: https://www.youtube.com/bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake