(Bloomberg) -- Australian and New Zealand bond yields surged Friday as investors around the world question expectations that central banks will take a softer approach to quelling inflation.

The 10-year Australian yield jumped 13 basis points to 3.42%, tracking a move in Treasuries overnight, while similar-maturity yields in New Zealand’s climbed eight basis points to 3.53%. The sell-down reflects the success of Federal Reserve officials in damping investor optimism that softer-than-forecast price readings this week meant a substantially lower peak for interest rates. 

Investors had piled back into bonds recently, with fears of recessions helping the Bloomberg Global Treasuries index return 1.9% in July, the best month in two years. 

But last week’s robust US labor-market report and this week’s parade of hawkish Fed speakers is causing fresh pain in sovereign debt markets. 

Read: Fed’s Daly Says Cooling Inflation Is Welcome, But No Victory Yet

The Bloomberg gauge’s total loss this year still stands at 13%. Australian government notes have outperformed, with a year-to-date drop of 7.9%.

The yield premium of debt in Antipodes markets over Treasuries has widened dramatically this week. Next week, bonds in the two countries face fresh hawkish threats. 

The Reserve Bank of Australia on Tuesday delivers minutes from its Aug. 2 meeting, when it hiked by half a percentage point for a third-straight month. A day later the Reserve Bank of New Zealand is expected to go one better, with a fourth-consecutive increase of that magnitude.

Traders will be on edge given the potential for policy makers in Wellington to signal plans to stay aggressive given that data on Friday showed manufacturing activity rebounded and food prices jumped.

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