Global government bonds are set for steep monthly losses as fears tied to the Iran conflict boost worries over stagflation, with investors pricing hotter inflation and weaker growth. Short-dated debt steadied briefly, but oil pushing above $100 is driving bets on higher-for-longer interest rates, reducing the appeal of safe-haven government debt. China’s bonds are comparatively resilient.
Global business surveys due this week are expected to show worsening growth and rising inflation after seven weeks of Middle East conflict, with Europe seen as particularly vulnerable. Analysts warn the mix could trigger stagflation—weak economies with stubborn prices—forcing policymakers to reassess interest rate plans based on the latest data from Australia to the US.
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