The selloff in bonds is being led by the U.S. but is not restricted to it.

The old adage that the rest of the world sneezes when the U.S. catches a cold very much applies to government debt.

The 30-year Japanese bond yield BX:TMBMKJP-30Y just rose to the highest level in history as the 10-year U.K. gilt yield BX:TMBMKGB-10Y rose to its highest point since June 2008. German 10-year bund yields BX:TMBMKDE-10Y recently hit their highest since 2011.

That comes as the 10-year Treasury yield BX:TMUBMUSD10Y reached the highest level of the second Trump administration.

Yields move in the opposite direction to bond prices.

Moyeen Islam, a Barclays fixed-income strategist, last week calculated the tight correlation between U.S. and U.K. 30-year yields since 2023. For every 1% move in U.S. long-term rates, U.K. rates move by about 0.67%.

Some of that correlation is that the same factors, like the Iranian conflict and the artificial-intelligence build-out, are impacting multiple economies. But part of the correlation is simply a factor of market sentiment.

"Markets are increasingly pricing a world of persistent fiscal pressures and elevated sovereign term premia, but not necessarily unique U.S. fiscal challenge," said Bank of America strategists led by Oliver Levingston in a recent note.

Major markets may be taking their signal from U.S. bonds, but credibility gaps in Europe are exacerbating the moves, the strategists added.

Japanese yields, meanwhile, moved higher as U.S. Treasury Secretary Scott Bessent said it was his belief that the Japanese government and the Bank of Japan would do things that lead to a stronger yen.

The broadcaster NHK reported that Bessent told Japanese officials the Bank of Japan should lift interest rates.

-Steve Goldstein