Global daily for peace and security buy bonds

Marketing communication 19 August 2026

"For peace and security, buy bonds" Global Daily

RaboResearch Market comment Global Economics & Markets The rout in global bonds is the big headline at the moment, joined today by a sell-off in global knowledge.rabobank.com chipmakers. On the latter, it’s not just whether the market has gotten ahead of itself and Chinese competition, or even of society; it’s also whether rising global bond yields sink most boats. Michael Every There are many explanations for what’s going on in global bonds but a war in the Middle East Global Strategist energy complex creating a global shortfall in refined products like diesel, now rippling through the US economy, is a very large contributing factor.

On that, yesterday saw Trump post that Hormuz is ‘new US territory’: ridiculous, but then again there are parts of the US that don’t like Trump, the US Navy, or fossil fuels. More pointedly, Trump made clear there are “no talks’ with Iran. Importantly, however, CNN claims ‘Iran has lost significant control’ of Hormuz as vessels shift to the Omani southern passage through it, backing the US Navy narrative that it, not civilian ship-tracking firms, has the best measure of how much oil is flowing – just not refined products.

This is driving the US approach of throttling the Iranian economy – the efficacy of which sees different takes: ‘Battered by war, Iran’s rulers wary of more economic pain and unrest if US tightens pressure’, says Reuters; ‘There is no breaking point’: The problem with Trump’s plan to economically strangle Iran’, says Politico.

Of course, besides global shortages of refined products, the risk is Iran lashes out: it’s attacking more ships in Hormuz; the UKMTO says a vessel was struck off Yemen; and the UAE says Iran just targeted it for the first time in months, cutting off economic links with Iran in response.

As the Washington Post reports the US might shutter Gulf military bases to consolidate in Jordan and/or Israel, one-step forward, one-step back progress towards regional stability continues. An Israeli strike on Hamas, following one on Hezbollah, was followed by one on a Syrian military airport, allegedly to prevent a planned Turkish troop deployment. Turkey-Israel tensions are one to watch in the Middle East longer term.

But it’s not just one war that global bond yields have to focus on: it’s two. With reports of panicked Russians seeing runs on banks and a senior Russian economist getting fired after saying Moscow cannot win an economic war of attrition vs. Ukraine, rumours continue of Russian escalation in weeks – as the European press report a German defence startup CEO is in hiding in Germany after a Russian plot against him.

Trump is pushing for a meeting with North Korea’s Kim this year. Expect Rocket Man headlines to try to prevent North Korean rockets and men heading towards Ukraine (where ousted defence minister Fedorov is demanding elections in a direct challenge to Zelenskyy). The Hong Kong press responds that ‘South Korea accelerates military self-reliance over Trump’s ‘unpredictability’’, which is what the US wants, and which is very expensive, as others are finding.

Indeed, the Japan Times argues the country’s ‘nuclear doublethink is getting harder to defend’, and that, “The nation’s atomic weapons taboos are undermining its security strategy.” Yes, that’s an argument for Japan to develop its own nuclear deterrent. Can you hear JGB yields heading into orbit in tandem? At which point, whose defensive financial shield stands over that bond market and JPY? That’s right: the US. Or nobody.

1/7 RaboResearch | "For peace and security, buy bonds" | :16 Please note the disclaimer at the end of this document.

Meanwhile, Chinese bond yields are heading in the opposite direction to the rest of the world. Yet anyone thinking this is a global reserve asset and FX shift in progress is, for now, mistaken. Almost nobody is selling US Treasuries and the US dollar to hold Chinese government bonds and CNY as safe asset and global currency: that’s not how the world works, or can work, as currently constituted.

Falling Chinese yields instead reflect an economy stuck in a deflationary rut similar to…