Bonds pay a fixed coupon, so when traders fear higher inflation they demand a higher yield to compensate — and because price and yield move inversely, that pushes bond prices DOWN. The 30Y falls most because longer maturities have greater 'duration' (more years of fixed cash flows exposed to inflation), so a small yield rise means a bigger price drop than on shorter bonds.

The 'yield curve' just plots yields from short to long maturities. Short-dated yields track expected central-bank policy, so when a rate hike looks less likely the 2Y stays put; long-dated yields reflect growth and inflation expectations, so oil-driven inflation fear lifts the 10Y. That combination steepens the curve — a normal, upward-sloping curve is generally read as a healthier signal than an inverted one.

A credit spread is the extra yield a company must pay over a government bond to compensate for default risk. Tight spreads (79bp is low) mean investors are demanding little extra reward, signalling confidence. If oil worries deepened into a growth scare, you would typically expect spreads to WIDEN — pushing corporate bond prices down — so a stable spread here tells a beginner that the credit market is not yet flashing alarm.

The BoJ owns a large share of Japanese government bonds, and its buying has historically kept JGB yields pinned low. When producer prices run hot, traders anticipate the BoJ eventually stepping back, which would let JGB yields rise (and prices fall). This also matters globally through the 'carry trade': cheap yen funding is borrowed to buy higher-yielding foreign bonds, so any hint of higher Japanese yields can ripple into US and European bond markets.

Gilts are UK government bonds, and their prices move inversely to yields just like Treasuries. When oil pushes up inflation expectations, traders sell gilts (prices down, yields up) because the fixed coupon buys less in real terms; longer-dated gilts, with more duration, fall hardest. Beginners can watch the BoE's expected path — if a rate cut looks less likely, short-dated gilt yields tend to rise first.

FX and gilt markets are linked: a weaker pound can raise imported inflation, which pressures the BoE to keep rates higher and tends to lift gilt yields (pushing prices down). Deep, liquid FX turnover generally means smoother pricing of gilts for overseas investors, since foreign buyers must convert currency to hold UK bonds — so healthy FX plumbing supports orderly demand at gilt auctions.