Australia, New Zealand Bonds Join Global Sell-Off as QE Looms

(Bloomberg) -- Bonds in Australia and New Zealand joined a global sell-off on mounting concern that stimulus spending by nations worldwide to counter the fallout from the coronavirus will hit markets with a deluge of debt.

The yield on Aussie benchmark 10-year notes jumped 17 basis points to 1.38%, its highest since Jan. 2. The move comes as investors await a Thursday announcement from the Reserve Bank of Australia and a speech by Governor Philip Lowe that may usher in unconventional monetary policy. The yield on similar-maturity kiwi bonds climbed 17 basis points to 1.63%.

Prospects of fiscal expansion and more bond sales are ruling global sentiment after countries around the world announced stimulus packages worth more than a trillion dollars in an attempt to shore up financial markets and businesses reeling from the viral outbreak. While Germany and France have pledged to guarantee hundreds of billions in bank loans, some nations have allocated new money for cash handouts and medical care.

The 10-year yield on U.S. Treasuries rose 11 basis points to 1.19% on Wednesday, as turmoil rocked all markets amid a mad rush to sell even the highest-quality assets.

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