Trading Day: Bonds shaken, and stirred

On Monday, the benchmark 10-year U.S. Treasury yield surged above 4.75% for the first time since January last year, marking a worldwide bond selloff. This surge impacted stock markets as investors reacted to escalating tensions between the U.S. and Iran, and a rise in oil prices back above $90 a barrel. Fed's Warsh reassured investors of the Fed's commitment to its 2% inflation target during his Jackson Hole speech, leading to relief in the markets.

However, the bond market still faces uncertainties. Apart from the U.S., France and Germany also saw their bond yields at multi-year highs. Meanwhile, China's exchange rate remains a contentious issue, with many observers suggesting that a significant appreciation of the yuan could help alleviate global imbalances and promote sustainable growth.