There's been a huge sell-off in Australian government bonds

Photo: Rodrigo Arangua / AFP / Getty Images

The sell-off in Australian government bonds has continued on Monday.

The yield on the benchmark 10-year government bond pushed past 2.8%, for the first time since March.

It follows a sharp rise in bond yields last week of around 15 basis points:

Bond yields rise as prices fall. With the bond market much larger and more liquid than equities, moves of this size are notable.

Martin Whetton, senior rates strategist at ANZ bank, said that last week’s employment figures have contributed to the recent price moves.

“Yields have risen in AUD rates as the market has reconsidered the theme of ‘lower for longer’ after yet another strong employment print,” Whetton told Business Insider.

“With other economic data also showing a degree of strength, and a more hawkish Bank of Canada and Bank of England, yields have shifted.”

Indeed, the rise in Australian government bond yields comes amid a broader sell-off in major global bond markets, as central banks maintain their current plans to tighten monetary policy.

UK government bond yields rose by more than 15 basis points at the end of last week following bullish comments by the Bank of England (BoE) at its interest rate annoucnment on Thursday.

Although the BoE kept interest rates on hold at 0.25%, committee members surprised the market by indicating that another rate hike could come as soon as November.

In the week before, the Bank of Canada unexpectedly raised interest rates one month ahead of the market’s expectations.

As part of the global price-action, benchmark US 10-year treasuries have pushed above 2.2% for the first time since early August.

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