LONDON, July 7 (Reuters) - A significant rise in government bond yields over the past week could have quite a bit further to run as markets start to price in a normalisation of ultra-easy monetary policy, the CIO for global fixed income at AXA Investment Managers said on Friday.
Because quantitative easing was used as a substitute for negative interest rates, unwinding QE will be a key part of the normalisation of rates policy, Chris Iggo said in a note.
”The significant increase in government bond yields over the last week suggests that markets are starting to price this in,“ he said. ”My guess is that it will have quite a bit further to go.
Government bond yields around the world have risen sharply over the past week as a string of hawkish comments from central bankers spark a reassessment of the rates outlook. German 10-year government bond yields, for instance, are hovering near 18-month highs at around 0.58 percent. (Reporting by Dhara Ranasinghe, , editing by Nigel Stephenson)