Global Bond Market Turbulence Sparks Sterling Slide, Eurozone Inflation Rise

Global financial markets are experiencing turbulence driven by rising government debt concerns and bond sell-offs, with particular stress in the UK where 30-year gilt yields have surged to levels not seen since 1998, dragging sterling down over 1%. This volatility reflects broader worries about fiscal strategies, as Britain faces challenges ahead of the autumn budget where tax hikes are expected, and Prime Minister Keir Starmer has reshuffled his cabinet to address economic instability. In the US, President Donald Trump has returned to the Oval Office amid court challenges and tariff policy scrutiny, while markets anticipate Federal Reserve easing, with an 89% chance of a rate cut this month, pending key labor data including the JOLTS report and nonfarm payrolls. Eurozone inflation ticked up to 2.1%, supporting the ECB's cautious stance, even as European banks push for regulatory changes to facilitate cross-border operations amid market jitters. Equity markets are volatile but showing some resilience, with futures in Europe opening marginally higher despite the bond market pressures. Overall, the interplay of geopolitical events, fiscal policies, and central bank actions is shaping a complex and uncertain environment for global investors.