Bond prices and yields move in opposite directions, so a falling yield means Treasury prices are ticking up. Traders buy bonds when they expect softer inflation because it raises the odds of Fed rate cuts, which makes today's fixed coupons more attractive. Longer-maturity bonds like the 10-year have higher duration, so they gain more in price for the same drop in yield — that is why the 10-year is where the action shows up.

More borrowing means more bonds for the market to absorb. When investors expect a larger supply of Treasuries, they often demand a slightly higher yield to buy them all — extra supply tends to push prices down and yields up, especially at the long end (the 30-year sits at 5.24%). This is a slow-burn, structural pressure rather than a same-day mover, but it helps explain why long-dated yields stay elevated.

A credit spread is the extra yield companies pay over safe Treasuries to compensate for default risk. A tight 79 bp spread means investors are relaxed about defaults and happy to lend cheaply — a 'risk-on' signal. Beginners watch spreads because they widen fast when fear rises (risky borrowers' bond prices fall) and narrow when confidence returns; today's tight spreads echo the modestly positive equity tone.

The BoJ owns a huge slice of Japan's government bonds, which keeps JGB yields low and anchors the global carry trade — where investors borrow cheaply in yen to buy higher-yielding bonds abroad. If wholesale inflation stays firm, markets price a greater chance the BoJ lets yields rise; higher JGB yields can pull money back to Japan and unwind carry trades, rippling into US and European bonds too.

Gilt yields reflect where traders think Bank Rate is heading. Stronger growth plus energy-driven inflation argues for the BoE keeping rates higher for longer, which tends to push gilt yields up and prices down (the price/yield seesaw). Because longer gilts carry more duration, they fall most in price when the market prices out rate cuts — so beginners watch the growth-versus-inflation tug-of-war closely.

FX and gilt markets are linked through hedging: foreign investors who buy gilts often hedge their sterling exposure, and the cost of that hedge affects how attractive gilts are versus US Treasuries or Bunds. Healthy, liquid FX markets make it cheaper for overseas buyers to hold UK bonds, supporting demand at gilt auctions and helping keep yields contained. This is background 'plumbing' news rather than a same-day yield mover.