Global bond markets have the jitters and that’s now feeding into the US sharemarket, where the concentration on a handful of mega tech stocks has made investors unusually vulnerable.

Bond yields have been edging up, particularly those on longer-term bonds, driven largely by concerns about rising government debt levels in a volatile global economic and geopolitical environment.

The unknown impact on the global economy of Donald Trump’s trade war is driving up concerns about debt.Credit: Bloomberg

In the US, 30-year Treasury bond yields hit 4.97 per cent on Tuesday, edging closer to the 5 per cent level it has rarely breached. The yield on those bonds has risen almost 20 basis points in the past month.

The yield on UK bonds with the same maturity closed at 5.67 per cent on Tuesday, the highest since 2006, after earlier hitting a 27-year-high. German and Dutch yields on their 30-year bonds were the highest since 2011 and France’s the highest since 2009.

The common thread in the rising long-term debt yields, is debt.

In the US, government debt is now about $US37 trillion ($56.8 trillion) and with a federal government deficit approaching $US1.9 trillion, can only rise further. The US is already up against its debt ceiling, which will produce the annual brinkmanship in Congress this month over an increase in the debt limit before the US Treasury’s “extraordinary” measures to defer spending are exhausted.

Concerns about debt are elevated because of the impact on the global and individual economies of Donald Trump’s trade war … and the uncertainties it is generating.

In the UK, there are fears that the Chancellor of the Exchequer, Rachel Reeves, will have to raise taxes to........

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