The hammering of Australian government bonds and spike in the Australian dollar to a three-year high reflect rising optimism on the economic outlook, and there’s no sign of an end to the reflationary trend, which has also propelled commodities higher.

The 10-year Australian government bond yield shot 7 basis points higher to 1.65 per cent, its highest since May 2019. The Australian dollar soared to US79.18¢. The last time it was around these levels was February 2018.