(Bloomberg) -- New Zealand central bank’s record interest-rate hike is a warning to investors that the global tightening cycle may be far from over, according to HSBC Holdings Plc.

The nation’s sovereign bonds sold off Wednesday, after the Reserve Bank of New Zealand raised interest rates by a record 75 basis points and signaled more tightening. Yields on the benchmark two-year paper, the most sensitive to policy rates, have risen more than 260 basis points this year, in a global rout that had shown signs of moderating recently on bets the US Federal Reserve would slow its hikes.

The “Reserve Bank of New Zealand is the ‘Kiwi in the coal mine’,” said Frederic Neumann, chief Asia economist and co-head of global research Asia at HSBC. “By stepping up tightening, the RBNZ delivered a potent reminder that the global tightening cycle is far from over.”

Government debt in most of the world’s major economies has had a tough year, as their central banks joined their US counterpart in the most aggressive rate-hike campaign in generations. While several Fed officials have recently suggested a potential slower pace of policy tightening, the majority of them continued to leave the door open to another jumbo increase next month. 

Global sovereign dollar bonds have lost more than 17% this year, according to a Bloomberg index. Meantime, analysts at Goldman Sachs Group Inc. said the 10-year Treasury yield will trade at 4% or higher through at least the end of 2024.

New Zealand’s two-year bond yield surged by 19 basis points to about 4.6% on Wednesday.

©2022 Bloomberg L.P.