A storm shakes global bond markets, amid financial and political concerns

Global financial markets face unprecedented pressure with the escalation of fears of the breadth of the deficit gap and the high cost of borrowing, which made sovereign bonds at the heart of the global economic scene. According to a report by the British Financial Times, challenges are increasing in front of major governments that try to manage huge debts and enhance growth without igniting inflation. The experts describe the situation as a “almost complete storm” that combines political tensions, government divisions, and central bank decisions.

In the United States, fears increased after the Court of Appeal ruled that most of the customs duties imposed by President Donald Trump are illegal, threatening hundreds of billions of government revenues. As a result, US Treasury bonds witnessed a strong sales wave, which prompted investors to asylum to gold as a safe haven. As for Europe, the revenues of French bonds increased for 10 years to 3.58%, amid a charged political atmosphere and the possibility of the government to vote in blocking confidence. In the United Kingdom, the returns of government bonds for 30 years reached the highest level since 1998 at 5.723%. In Japan, fears escalated after electoral losses for the Prime Minister, which may open the door to major political changes that include increasing government spending, at a time when the returns on long -term bonds rose to record levels. Experts believe that the common factor in these developments is political and economic blurring, Investors require higher returns compensation for risks, in light of expectations of high inflation and interest in the future. Economists indicate that September usually witnesses a large wave of bond versions, which increases the supply in the markets and presses prices. The expansion of the financial deficit, military spending and infrastructure exacerbates pressure, while monetary policies remain restricted at high interest rates. Amid these atmosphere, the concern for global bond markets to turn into a focus of financial instability, in light of the decline in confidence in the ability to control inflation, the possibility of a wave of selling bonds in favor of gold and safer assets.