Bond prices and yields move in opposite directions. When traders fear higher inflation, they demand a higher yield to hold a bond (because inflation erodes the fixed coupons), so they sell bonds — prices fall and yields rise. Longer maturities like the 30Y have more 'duration', meaning their price is more sensitive to each move in yield, which is why the long end can move sharply on an oil shock.

Short-dated yields track expectations for the central-bank policy rate. If markets believe the Fed will hold rather than cut, near-term yields stay anchored and the front of the curve stays firm. Beginners can think of the 2-year yield as a rough average of where traders expect the policy rate to be over the next two years — no cuts means little downward pull on it.

A credit spread is the extra yield a company bond pays over a safe government bond to compensate for default risk. Tight spreads mean investors feel calm and are willing to lend cheaply; when fear rises, spreads widen and corporate bond prices fall. Watching spreads is how beginners gauge whether a shock is 'risk-off' for credit — 80bp is historically low, so credit is still relaxed.

The BoJ owns a very large share of JGBs, which has kept Japanese yields unusually low for years. Low domestic yields encourage the 'carry trade' — investors borrow cheaply in yen to buy higher-yielding bonds abroad, such as US Treasuries. If the BoJ ever pulls back and JGB yields rise, that carry trade can unwind, pulling money out of foreign bonds, so beginners should watch Japan even when trading US or UK debt.

Government bond markets are closely linked, so when US Treasuries and Bunds sell off on an inflation scare, gilts usually move the same way — yields up, prices down. A UK-specific driver would be the Bank of England's rate path and gilt supply (auctions), but on a quiet UK day, traders take their cue from the bigger global market. Higher oil raises expected inflation, which lifts the yield investors demand to hold longer-dated gilts.