I read your article, perhaps the bonds spiked because they were over priced nothing to do with inflation IMO. Bonds are expensive and as they peak profits are taken while they are on the table.
Our bonds been in high demand as the OCR is too high - has to fall. Interest rates heading towards zero in all but the worst economies. This has pushed the AUD to unsustainable levels - notice commodities have come off and the AUD should have come off by now. Opposite has occurred and this is the reason - that and straight carry trade.
The other issue that may cause bond traders some jitters - instability in Europe - Spanish default. But short term that would see those bonds in the USA spike again, yield back down in other words and for another round of profit taking by very large bond funds.
