Middle East turmoil and trade tensions pushed US Treasury yields higher, with the 10-year yield reaching an 18-month high above 4.7%. (Reuters pic)SINGAPORE: The dollar rode US Treasury yields higher on Friday and hovered near a 40-year peak against the yen, as a spike in oil prices and a renewed global trade war raised the stakes for inflation.Sterling languished around a three-week low and bought US$1.3313 in early Asia trade, after sliding nearly 0.5% overnight against a resurgent dollar.The euro was similarly nursing losses and wobbled at US$1.1376, drawing little support from the prospect of imminent European Central Bank rate hikes, while the dollar held near a three-week top against a basket of currencies at 101.45.The dollar's resurgence came as oil prices climbed back above US$100 a barrel for the first time since May after Yemen's Houthis struck two Saudi oil tankers in the Red Sea, extending the Middle East war to a second major shipping chokepoint.US president Donald Trump promised "major military punishment" for Iran and its Houthi allies.Adding to the inflationary pulse, the Trump administration said it will impose new tariffs of 10% and 12.5% on goods from 60 trading partners over allegations of lax enforcement of forced labour bans, just as a temporary 10% global tariff expires."The world must be prepared for a double whammy of tariffs, because essentially oil is a tariff... and the independent supply disruptions...
there is a certain actual quantity-determined disruption... then there's a price shock from the (trade) tariffs as well," said Vishnu Varathan, Mizuho's head of macro strategy for Asia-Pacific."I think the world pretty much is more comfortable guessing Trump's style with tariffs, which is to say, big on upfront escalation and open to beg and negotiation. Whereas with Iran and the Houthis, you can't undrop a bomb, can you?"The fresh turmoil in the Middle East and renewed trade tensions sent US Treasury yields higher on inflation fears, with the benchmark 10-year yield rising to an over 18-month high above 4.7% overnight.The 30-year yield held well above the 5% level, while 2-year yields were near their highest since February 2025 and last stood at 4.3555%."I'm sure the question about whether 30-year yields will hit 6% is not far away, and your 10-year yield at 5% may be now more a bet than a fear," said Varathan.The strength in th…
SEOUL, July 24 (Yonhap) -- South Korea will step up efforts to ease upward press...
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