The cost of Government borrowing jumped further after two surprise interest rate rises this week delivered a reality check to investors hoping for an end to monetary tightening.
Bond yields – the interest the Government must offer to buyers of its debt – have steadily climbed as global inflationary pressures have eased more slowly than hoped forcing central banks to keep interest rates high.
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On Wednesday, the Bank of Canada defied expectations and lifted its benchmark rate, following in the footsteps of the Reserve Bank of Australia earlier this week.
"With the Federal Reserve, ECB, and Bank of Japan due next week and this week's hikes pointing to further interest rate pain, bets about a Fed pause next week are being taken off the table over concern the Fed may well follow suit," said CMC Markets' Michael Hewson.
The Fed will announce its decision on June 14. The ECB and the Bank of Japan will follow a day after and the Bank of England a week later.
Investors see a 68% chance that the US central bank will skip raising interest rate in its June meeting, according to the CME's Fedwatch tool, although it is expected to resume hiking rates in July.
The 2-year bond yield stands at 4.568% and the 10-year at 4.294% at nine-month highs and close to levels seen in the wake of the infamous mini-budget under former PM, Liz Truss.