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The relentless sell-off in government bonds worldwide remained the dominant force in financial markets last week.

The steady grind higher in bond yields worldwide continues to be the central development for financial markets.

The Federal Reserve's September meeting delivered an interest rate hike and unmistakably hawkish message last week, making it clear that the central bank is squarely focused on bringing down inflation.

Friday's stellar US jobs report has ratcheted up the pressure on the Fed ahead of its September meeting, with investors now leaning toward a rate hike rather than a hold.

The gradual but relentless rise in long term rates continues to drive markets worldwide. The Trump administration is clearly concerned.v

US inflation for July came out exactly as expected and there was little news elsewhere to move markets. Stocks, bonds and the dollar all closed Friday almost exactly where they had opened Monday, in a typical week of slow summer trading.

Labor data from the US added further ammunition to the doves in the Federal Reserve, and rate markets continued pushing back their expectations of hikes in the US.

Uncertainty surrounding last week's Federal Reserve meeting was unusually high. In the end, not only did the Fed not raise rates, but chair Warsh sounded rather dovish.

Markets are finally beginning to take notice of the renewed US-Iran hostilities and surge in oil prices, which last week jumped back above $100 a barrel.

The latest flare up in tensions between the US and Iran failed to trigger any significant safe haven flows in currency markets, or in any financial markets for that matter.

A pull back in risk sentiment saw stocks markets drop globally last week, led by the big winners of the last few years, technology companies.

The Fed, now under the stewardship of the new chair Kevin Warsh, seems considerably more concerned about inflation than markets expected, if his first press conference at the helm is anything to go by.