Inflation + geopolitical double whammy, the market is re-pricing duration risk, and this wave of U.S. Treasury yields hitting 5.1% is a bit aggressive.

This week, global markets were hit by a dual shock of inflation and geopolitical tensions. The U.S. April CPI/PPI came in above expectations, lowering rate-cut expectations, and long-term Treasury yields rose to 5.1%. After Kevin Wos took over at the Federal Reserve, the market again priced in higher interest rates staying in place for longer. Escalating tensions in the Middle East and delays in Iran nuclear talks pushed oil prices higher, with WTI breaking through $103. UK Prime Minister Starmer faced pressure from the Labour Party after losses in local elections, weighing on the pound and putting pressure on stocks, bonds, and foreign-exchange markets. The U.S. dollar rose for five consecutive days; precious metals rebounded briefly before falling back, and U.S. stocks turned softer ahead of the close. India raised gold import tariffs to curb foreign-exchange pressure, while Samsung in South Korea needs government coordination due to strike risks.