Global bond selloff deepens as U.S. 30-year touches 4.98%, UK yields surge to 1998 high

[World Map on digital display]
da-kuk/E+ via Getty Images

The global bond markets came under pressure on Tuesday, with namely long-dated yields in the U.S. and UK surging amid renewed tariff uncertainties, rate cut outlook and other macroeconomic challenges.

In the U.S., the 30-year Treasury yield (US30Y [https://seekingalpha.com/symbol/US30Y]) climbed as high as 4.98%, its highest since July, as the Federal Reserve's monetary policy and President Donald Trump's tariffs continued to take the spotlight.

The sell-off was even sharper in the UK, where the 30-year gilt yield jumped to its highest level since 1998, echoing a broader rally in global yields, as concerns over the mounting debt in several countries.

"Yields on longer-dated government bonds in advanced countries continue to rise, with the UK notably experiencing this alongside a weaker currency—similar to what is more usual for developing countries," Mohamed El-Erian, Allianz chief economic advisor and former PIMCO CEO, said.

Elevated borrowing needs, coupled with lingering questions about the Bank of England’s inflation fight, pushed U.K. debt markets to levels not seen in nearly three decades. The British pound (GBP:USD [https://seekingalpha.com/symbol/GBP:USD]) slid about 1% against the dollar and also weakened against the euro, as investors worried over fiscal credibility and surging financing costs.

France's long-dated yields also surged to their highest point since 2009. Last week, French Prime Minister Francois Bayrou said he will seek [https://seekingalpha.com/news/4489047-french-pm-francois-bayrou-calls-for-confidence-vote-over-budget-plan-fueling-market-unrest] a confidence vote from parliament on September 8 as he seeks parliament backing for a €44 billion austerity package as part of the 2026 budget.

Here are some exchange-traded funds linked to the fixed-income markets: (NASDAQ:TLT [https://seekingalpha.com/symbol/TLT]), (NYSEARCA:TLH [https://seekingalpha.com/symbol/TLH]), (NASDAQ:IEF [https://seekingalpha.com/symbol/IEF]), (NASDAQ:IEI [https://seekingalpha.com/symbol/IEI]), (NASDAQ:SHY [https://seekingalpha.com/symbol/SHY]), (NYSEARCA:SGOV [https://seekingalpha.com/symbol/SGOV]), (NYSEARCA:SCHO [https://seekingalpha.com/symbol/SCHO]), (NYSEARCA:BIL [https://seekingalpha.com/symbol/BIL]), (NYSEARCA:AGG [https://seekingalpha.com/symbol/AGG]), (NASDAQ:BND [https://seekingalpha.com/symbol/BND]), (NASDAQ:VCIT [https://seekingalpha.com/symbol/VCIT]), (NYSEARCA:MUB [https://seekingalpha.com/symbol/MUB]), (NASDAQ:MBB [https://seekingalpha.com/symbol/MBB]), (NYSEARCA:JNK [https://seekingalpha.com/symbol/JNK]), (NYSEARCA:LQD [https://seekingalpha.com/symbol/LQD]), (NYSEARCA:HYG [https://seekingalpha.com/symbol/HYG]), and (NYSEARCA:TIP [https://seekingalpha.com/symbol/TIP]).

MORE ON MARKETS

* Weekly Market Pulse: The Sound Of Silence [https://seekingalpha.com/article/4818392-weekly-market-pulse-sound-of-silence]
* De-Dollarization Is Accelerating [https://seekingalpha.com/article/4817916-de-dollarization-is-accelerating]
* A Major Move Is Ahead For Interest Rates (Technical Analysis) [https://seekingalpha.com/article/4816874-a-major-move-is-ahead-for-interest-rates]
* European indexes start the month higher [https://seekingalpha.com/news/4490730-european-indexes-rise-as-manufacturing-pmi-numbers-for-the-region-tick-higher]