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Global fixed income markets experienced a risk-off sentiment coupled with higher interest rate volatility, primarily catalyzed by stronger-than-expected US economic data. The most significant movement was the broad-based rise in UST yields, driven by robust figures like the ADP Employment Report and a solid ISM Services PMI, which collectively reduced the perceived likelihood of aggressive near-term Fed rate cuts. The yield curve demonstrated a bear-steepening bias, as the long end of the curve rose more sharply, with the 10Y yield surpassing 4.15% to hit a one-month high, reflecting increased concerns over fiscal supply and persistent term premium pressure. The 2Y yield also trended higher but was relatively anchored by continued uncertainty surrounding the precise timing and pace of the Fed’s easing cycle. Corporate credit markets reacted defensively to the rise in risk-free rates; both Investment Grade (IG) and High Yield (HY) spreads widened slightly, with the ICE BofA US High Yield Index Option-Adjusted Spread (OAS) ticking up to 3.13% from the previous day’s 3.04%, indicating a minor deterioration in credit risk appetite. This simultaneous movement of higher UST yields and wider credit spreads resulted in a challenging environment for bond investors, especially those with longer duration or higher credit risk exposure. Market participants are now closely monitoring upcoming inflation data and official commentary, which will be essential for validating the current hawkish repricing.