Equities to have mixed reaction to higher bond yields Nicki Bourlioufas | 03 May 2021Text size
Government bond yields have been rising in Australia and globally, which could hurt returns for some equites that are sensitive to interest rates rises, though the big banks are expected to be resilient.
Dr Shane Oliver, chief economist with AMP Capital, expects the Australian 10-year government bond yield to rise to about 2 to 2.25 per cent by the year’s end, but noting that “continuing RBA dovishness and low underlying inflation should help limit the rise in bond yields to this.” Australia’s 10-year bond yield has jumped 88 basis points over the past 12 months to 1.74 per cent.