The yield on Canada's 10-year government bond surged toward 3.5% on Thursday, its highest level since July as the prospect of higher for longer rates becomes the global baseline. Global sovereign debt markets buckled under the weight of energy shocks and defiant rhetoric from Tehran, where German Bunds hit 2023 highs and UK Gilts reached five month peaks as investors price in the inflationary consequences of 100 dollar oil. Mojtaba Khamenei stated that the Strait of Hormuz will remain closed which forced a massive repricing of interest rate expectations across the G7. While the IEA announced a record 400 million barrel reserve release the bond market remains skeptical that this volume can offset the 20% loss in global trade fast enough. Locally the Bank of Canada faces a challenge as headline inflation at 2.4% and potential supply chain disruptions threaten to delay any pivot toward monetary easing.