Several markets around the world have completely unwound their Fed pivot rally

• Several markets have "completely unwound" their Fed pivot rally, NDR said.
• Yields on the 10-year note in the UK, Germany, and Canada are higher than where they were before the Fed's December meeting.
• Expectations of a March rate cut have fizzled after a spate of better-than-expected economic data.

The Fed pivot rally has had its naysayers among stock market pros, but bond markets worldwide are also beginning to pare back expectations of a March rate cut, Ned Davis Research said Tuesday. 

From Germany to Canada, investors are selling government paper, driving bond yields higher where they were before the Fed's last meeting in December. Yields rise as bond prices fall. 

"Several markets have completely unwound their Powell pivot rally," strategist Joseph Kalish wrote in a note on Tuesday.

Yields on the 30-year US Treasury are sitting at 4.38%, above the 4.30% level prior the Fed's Dec. 12 meeting. That change has occurred as markets have digested key US data points, from retail sales to jobless claims to inflation, that show the economy may still be running too hot for the central bank's liking. 

Those statistics "ran counter to a March rate cut that was nearly fully priced in before the MLK holiday."

And bond markets elsewhere have also seen a sell-off as investors recalibrate their expectations.

"In the U.K. and Canada, higher than expected inflation caused markets to rethink the path of rate cuts," Kalish wrote.

German 10-year yields are at 2.355% versus the 2.23% before the Fed meeting last month, NDR noted. The UK 10-year gilt is at 3.987% compared to the 3.97% on Dec. 12, and the Canadian 10-year yield is nine basis points higher at 3.49%.

While the Fed has signaled three rate cuts are on the table this year, markets had been pricing in as many as six, with the first one as early as March. That optimism drove a sugar rush for stocks and reversed what was a historic bond market rout in the US as investors lapped up higher-yielding bonds before a Fed pivot.

Yields on the 10-year US note are still lower than where they were before the central bank's December meeting, although Kalish noted that "yields were still significantly lower in the short to intermediate portions of the curve, with 2-year yields down a sharp 34 bp."