Global Bonds Extend Rout as Seven Fed Hikes Priced In for Year
- Lockdown in China adds to inflationary pressures from Ukraine
- Australian benchmark 10-year yields clear March 2020 highs
This article is for subscribers only.
Australian bonds tumbled Tuesday to extend this week’s global rout as investors anticipate the inflationary impacts of the war in Ukraine will spur aggressive monetary tightening across the developed world.
The yield on 10-year Australian notes jumped eight basis points to 2.53%, exceeding the high reached in the March 19 meltdown for the country’s debt market. That came after 10-year U.S. Treasuries and German bonds surged more than 10 basis points overnight and the rate on U.K. gilts climbed to the highest since 2018. Traders are certain the Federal Reserve will kick off a tightening cycle on Wednesday and raise rates at all six subsequent meeting this year.