Global Bond Markets Hit by Historic Yields Surge

Bond markets around the world are experiencing turmoil as yields rise to historic highs. In the US, the 30-year treasury yield has pushed up to 24-year highs, while in Britain, the 30-year gilt climbed above 6% for the first time since 1998.

The spread between French and German government bonds is at its widest since the European sovereign debt crisis in 2011. New Zealand's humble 10-year government bond has also seen a significant increase, climbing above 5% for the first time in nearly three years.

Experts believe that central banks will continue to hike interest rates to combat inflation, despite their blunt instrument not addressing supply-side issues. However, US inflation-linked securities have been less affected, with the breakeven gap increasing by a more modest amount.

New Zealand's bond market is also experiencing an increase in yields, with the median corporate yield rising 36 basis points in September. Companies like Ryman Healthcare and Infratil are seeing their bond yields jump due to concerns about their future performance.