Australian bond yields are ripping higher

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Mirroring the move in sovereign bond yields overnight, Australian government bond yields are ripping higher yet again on Friday.

Benchmark 10-year yields hit a high of 2.399% earlier in the session, falling fractionally in recent trade to 2.379%.

It currently sits at the highest level seen since May 5.

Australia 10-Year ACGB Yield

The selloff in Australian bonds mirrors similar moves seen in rates markets overnight.

“Global rates markets sold off again overnight with yields up 5-10 basis points (bps) and curves steepening,” said economists at ANZ.

“In Europe, yields for 30-year bonds in a number of key markets (Germany, France, Italy, UK, Finland, and Denmark) all rose around 7-10bps.

“US 30-year yields closed up 4.9bps.”

ANZ says that the moves in long-end sovereign bond yields suggests “markets are becoming increasingly nervous about whether this is ‘it’ for bonds, and that yields are now set to march ever higher.”

While ANZ believes yields will “continue to lift modestly”, it suggests that “larger moves would require a much firmer economic backdrop and there is still limited evidence of that”.

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