Aussie bond yields rise as Draghi turns hawkish

Australia government bonds are being hit hard after Draghi’s hawkish comments on Tuesday led to a spike in the German Bund yields and the treasury yields. 

The benchmark 10-year Aussie government bond yield jumped seven basis points to 2.44%. The 2-year yield rose three basis points to 1.69%. 

ECB’s Draghi said in a speech in Portugal that the deflationary forces have been replaced by reflationary ones, leading to a spike in the bund yields. Investors believe the central bank chief is prepping up markets for the QE taper. 

German 10-year yield jumped more than 10 basis points to 0.372%. Meanwhile, the 10-year treasury yield rose 6 basis points to 2.20%.