When traders think the Fed is less likely to hike, short-dated yields (like the 2Y, which tracks expected policy) tend to fall, and their prices rise — remember bond prices and yields move in opposite directions. But a rallying oil price is an inflation risk that can push the long end (10Y, 30Y) the other way, since bondholders demand more yield to protect against inflation eroding fixed coupons. Watch the gap between the 2Y (4.15%) and 10Y (4.63%): a wider gap ('steepening') often signals markets pricing easier policy now but higher inflation later.

Higher energy prices feed headline inflation, and inflation is the bond market's main enemy because it erodes the real value of fixed coupon payments. Traders typically respond by selling longer-dated bonds (pushing those yields up) and by raising their expectations for how long central banks keep rates high. The longer the bond's maturity, the more its price falls for a given rise in yield — that sensitivity is called duration, which is why 30Y bonds react most to inflation scares.

A credit spread is the extra yield companies pay over 'risk-free' Treasuries to compensate for default risk. A tight (low) spread like 79bp means investors are relaxed and demand little extra reward to lend to corporates — a sign of risk appetite. Beginners should watch for spreads widening: that usually happens when markets fear a slowdown or a shock (like an oil spike hitting growth), and it means corporate bond prices are falling relative to government bonds.

Japan matters to global bonds because its low yields have long funded the 'carry trade' — borrowing cheaply in yen to buy higher-yielding bonds elsewhere. If Japanese producer-price inflation runs hot, traders anticipate the BoJ letting JGB yields rise, which can unwind those carry trades and pull money back to Japan. The BoJ's bond holdings matter too: a central bank that buys fewer JGBs removes a big price support, tending to push yields up.

UK government bonds (gilts) behave like other sovereign bonds: prices fall when yields rise. Higher oil feeds UK inflation, and if traders expect the Bank of England to keep rates higher for longer to fight it, gilt yields tend to rise and prices fall — with longer-dated gilts (higher duration) moving most. Because global bond markets are linked, a sell-off in US Treasuries on inflation fears often drags gilt yields up too, even without any UK news.