Traders dump bonds on higher US, Canada, Australia yields, interest rates
ALBAWABA – Bonds slumped globally on Thursday as traders shifted towards United States (US), Canada and Australia bonds in favour of higher yields on rising interest rates.
The Canadian and Australian central banks announced surprise interest rate hikes this week, to curb inflation. Meanwhile, the US Federal Reserve Board (Fed) has been raising interest rates for more than a year.
Shorter-maturity US Treasury yields are just shy of their highest since March, while Australian bonds have jumped to decade-long highs on Thursday, Bloomberg reported.
With two major central banks following in the footsteps of the Fed, traders are reassessing the probability of rate cuts in the coming months.
According to Bloomberg, the battle against inflation may very well be far from over.
Concerns are building over more shifts and instabilities in the market as rate hike cycles prolong risks of volatility across global risk assets, the news agency said.
