Summary

After years of flirting with zero, sovereign yield curves throughout the developed world have gone vertical over recent weeks, triggering a steep sell-off in global bond markets.

The US 10-year Treasury is leading the way, yielding as high as 1.4490 percent in recent trading – a one-year high.  Other sovereigns have followed in tow, such as the Australian and New Zealand 10-year notes, both of which are hovering at fresh highs of around 1.85 percent.

The trend can be traced back to January, when yields began creeping upward after Democrats won control of the US Senate. It has only picked up speed since then, and is now sending ripples through equity markets as traders are being forced to reassess some of the high-flying valuations that have coalesced during the pandemic.