One of the enduring mysteries in financial markets right now is why they have been so bulletproof. Stocks, currencies and corporate bonds have weathered a series of shocks, from a worst-case-scenario Middle East energy squeeze to rogue and potentially deadly robots. This resilience is very welcome, but also very odd.\n\nThis week’s violent moves in the government bond markets bring with them the potential to spoil the mood.

The benchmark 10-year US government bond yield vaulted above 5 per cent, a space it has not occupied since 2007. At one point this week, it rattled up to 5.22 per cent, more than a full percentage point above where it started the year.\n\n“We’re in the danger zone,” said Derek Halpenny, an analyst at MUFG. Hedge fund managers and other types of speculators whacked by the turmoil may now need to offload entirely unrelated bets to keep the lights on and meet redemption requests.