XPS Pensions flags oil-driven inflation as trigger for Q3 global bond selloff, higher yields

By Public Technologies
  • XPS Pensions Group analysis flagged a Q3 global bond selloff driven by higher inflation expectations tied to Brent crude rising to USD 100.
  • US Treasury doubled long-term bond buybacks in August to curb financing costs as yields climbed.
  • Fed lifted rates 0.25% to 3.75%-4.00%, with four more hikes priced over 12 months; ECB raised to 2.5%, BOJ to 1.25%.
  • Bank of England held Bank Rate at 3.75% despite UK CPI inflation at 3.1% in the 12 months to August.
  • UK DB pension scheme funding improved on a low-risk basis as higher gilt yields reduced liabilities; LDI recapitalization remained muted.


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