From Chris Joye at the AFR:
Tuesday’s otherwise unexpected (at least by most) jump in long-term rates was determined by much larger foreign forces. A little appreciated fact is that Australia’s three- and 10-year government bond yields, which are the market’s best guess as to where the cash rate will be on average over those periods, are more than 90 per cent correlated with equivalent US rates. This is true in other economies too.
So why were US yields rising? It turns out that a heterodox case I have repeatedly posited here – whereby the popular and financially convenient “low rates for long” meme is junked by budding US wage pressures spooking bond bandits – has finally arrived.