The US government bond market -suffered a fierce, renewed sell-off and the dollar powered to a 13-year high -yesterday, as stronger economic data bolstered the case for an interest-rate increase and reinforced the view that the multi-decade bond bull market has reached a turning point.

The Republican sweep of the White House and Congress, coupled with president-elect Donald Trump’s promise to unleash a $1tn economic stimulus package of tax cuts and infrastructure investment, has caused a seismic shift in -global bond markets, with prices tumbling and borrowing costs rising as investors bet that inflation will finally reappear.

European bond yields had already jumped on the back of reports that the European Central Bank was considering changes to its securities lending programme, which would ease a bond shortage. The moves were reinforced by strong US durable goods data, and exacerbated by thin trading in bond markets ahead of the US Thanksgiving holiday.