Indian bond yields hit three-week high as oil surge revives inflation fears
When oil becomes expensive, inflation fears rise, so bond yields also go up.
The 10-year government bond yield increased from 6.6958% to 6.7204%, which is the highest level since June 19.
Remember: bond prices and yields move opposite (yield up = price down).
Oil prices (Brent) rose to around $76 per barrel after the US attacked Iran and stopped its oil sales. This happened due to tensions in an important oil route (Strait of Hormuz)
Oil prices went up because of global tensions, which increased inflation fears. That’s why bond yields also went up.
