Global Sovereign Bond Markets Face Worst Monthly Performance in Years

Key Facts

1Global sovereign bond markets are heading for their worst monthly performance in years driven by soaring energy costs and AI-led economic growth.

Global sovereign bond markets are heading for their worst monthly performance in years, driven by soaring energy costs and AI-led economic growth. Reuters reported that markets are experiencing significant sell-offs as investors adjust to expectations that interest rates will remain elevated for a longer period. This shift is being forced by persistent inflation and structural economic changes.

The combination of rising energy prices fueling inflation and the productivity boost from the AI boom is driving sustained economic growth. These factors are forcing a comprehensive repricing of long-term interest rate expectations across major economies. Recent data supports this environment of robust activity, including the US Services PMI which reached 58.7 on September 23, 2026.