Celina Jade
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Global bonds sell off as central banks signal end to easy-money era

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Global bond markets have been thrown into a panic over the last three days

A global bond selloff continued on Thursday, heaping pain on bondholders and driving some yields to their highest levels in more than a month, as investors digested messages from central banks this week on rolling back easy-money policies. The U.S. followed the lead of rising yields elsewhere, although the moves for the Treasury market were lagging behind their international counterpart. With global markets so interconnected, higher yields outside of the U.S could prompt foreign buyers to rebalance their portfolios in favor of far-flung bond markets, if only to avoid overexposure to U.S. government paper. The yield for the benchmark 10-year Treasury note TMUBMUSD10Y, +1.01% jumped 14 basis points in the last three days, putting this week on track for the largest weekly gain in almost four months. Although market participants have largely ignored the Federal Reserve’s warnings that it intends to stock to its plan for raising interest rates, it eventually took several central banks to make concerted comments on opening the door to tighter policy to spook bond investors. “The Fed has finally driven home its point to markets,” said Ian Lyngen, head of U.S. rates strategy for BMO Capital Markets, in a note to clients.