Global Markets Face Rising Yields, Supply Fears

Global markets faced renewed pressure as bond yields reached multi-year highs and oil prices rose above $100 a barrel ahead of an expected Federal Reserve rate increase. The 10-year U.S. Treasury yield climbed above 5%, raising borrowing costs for heavily indebted borrowers and increasing risks for stocks. Japan’s yen rally depends on whether the Bank of Japan adopts a more aggressive rate-hiking approach, while China’s stronger industrial output was offset by weak consumer demand and declining investment. A truce involving energy infrastructure brokered by President Donald Trump between Russia and Ukraine could ease immediate risks to diesel supplies, but it is unlikely to resolve the broader supply shortage.