Brent Oil: Conflict-driven surge shapes bond stress – Deutsche Bank
Deutsche Bank’s Jim Reid highlights that Brent Oil has surged sharply in Q3 as the US–Iran conflict re-escalated, driving a major global bond selloff and higher long-end yields. The report notes fresh gains in Brent and WTI, warns about benchmark roll effects on front contracts, and flags strength further out the futures curve, reinforcing inflation concerns and hawkish central bank risks.
Deutsche Bank's Jim Reid revealed that Brent Oil experienced a significant surge in Q3, fueled by the re-escalation of the US-Iran conflict. This resulted in a major global bond selloff, with 10-year Treasury yields reaching their highest point since 2011 for the seventh consecutive month. The report also highlighted that Brent crude oil had climbed 42% from its lows at the end of June, pushing 10-year Treasury yields upward.
Despite a surprise drop in PCE data, oil prices still contributed to inflationary pressures, with Brent crude climbing to $103.53 per barrel and WTI reaching $90.42 per barrel. The concern over the US-Iran deal lingered, as reflected in the December 2027 Brent future's climb to a new high of $81.25 per barrel. The report noted that the broader US Dollar remained strong, potentially countering hawkish expectations from the Federal Reserve and reducing the likelihood of Japanese intervention.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
