Countries that respond quickly to this year's sharp rise in inflation are being favored by bond investors, while economies that are slow to act may bear the cost of higher interest rates. Asset management institutions are buying Australian treasury bonds, betting that the country's four rate hikes since February mean that the interest rate hike cycle is coming to an end; at the same time, they are also increasing their holdings of German treasury bonds, and the yield is expected to decline. Investors believe that central banks that took action earlier can see the effects of policies more quickly, and there is less room for subsequent interest rate hikes; the market is betting that different economies will follow a path of differentiation in dealing with inflation.

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