Sovereign bonds continue strong sell-off

At a time when European countries are undertaking widespread austerity measures, US authorities extended the Bush-era tax cuts and continued a number of other stimulus measures. While equity markets rallied on the news, treasuries sank heavily yesterday and are sharply lower again today. At 8:40am, the benchmark 10-year treasury yield is 8bp higher to 3.21%. The short end and long end of the curve are also lower. UK gilt yields are also higher, up 6bp to 3.51%. German bunds have also sold off, with the European safe haven bond yield jumping over 3%, up 7bp this morning. Japanese 10-ye...