‘Disappointment Trade’ Propels Global Bond Yields to 2009 Levels

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Global bond yields have risen to highs last seen in 2009 ahead of a key Federal Reserve policy meeting, signaling concerns that interest-rate cutting cycles from the US to Australia may be ending soon.

Yields on a Bloomberg gauge of long-dated government bonds have returned to 16-year highs, with money market bets underscoring that sentiment. Traders are now pricing virtually no more rate cuts from the European Central Bank, while betting on an all-but-certain hike this month in Japan and two quarter-point increases next year in Australia.