The U.S. stock market got wrecked by earnings reports, I admit it, but now the global bond market is crashing too! With the ongoing escalation in the Middle East, oil prices are skyrocketing—Brent crude is heading toward $100/barrel. Global inflation pressure is climbing again, naturally triggering concerns from central banks and changes in market interest rates! Today, Germany's 10-year bond yield rose 3 basis points to 3.21%, hitting its highest level since 2011. Meanwhile, the U.S. 10-year Treasury yield climbed to 4.68% during the session, nearing the 4.69% peak seen at the start of the Middle East conflict. On the U.S. bond side, we also need to watch out for Japan's currency intervention, which could lead to selling U.S. Treasuries to buy yen. Looking at the data, the market is now pricing in two more rate hikes from the European Central Bank this year, each by 25 basis points. Meanwhile, bets on the Fed restarting rate hikes are heating up too. As shown in Chart 2, the probability of a 25-basis-point hike in September jumped from 28% to 47% today, creating a widening gap! Keep an eye on this aggressive wave of inflation pressure!