Short-dated gilts snapped their best streak in more than a month, swinging back to losses after US President Donald Trump’s pledge to extend attacks on Iran for weeks revived inflation fears.
Short-dated gilts snapped their best streak in more than a month, swinging back to losses after US President Donald Trump’s pledge to extend attacks on Iran for weeks revived inflation fears.
Andrew Bailey, governor of the Bank of England (BOE), during a monetary policy report news conference at the central bank's headquarters in the City of London, UK, on Thursday, Feb. 5, 2026. The Bank of England came within a vote of cutting interest rates as policymakers split 5-4 in favour of holding at 3.75%, after its updated forecasts showed inflation falling below target, growth slowing and unemployment rising. Photographer: Chris Ratcliffe/Bloomberg
The Iran war has clouded the outlook for inflation and economic growth across the globe and, in turn, where interest rates might be heading.
The Bank of England (BOE) in the City of London, UK, on Monday, Dec. 15, 2025. A widely anticipated interest-rate cut by the Bank of England this week will force policymakers to confront whether their easing cycle is nearing its end almost 1 1/2 years after it began. Photographer: Jason Alden/Bloomberg
Bonds across Europe surged as oil prices and inflation expectations eased on hopes that the Iran war may end in the coming few weeks, potentially turning the page on a torrid period for global markets.
Bonds across Europe surged as oil prices and inflation expectations eased on hopes that the Iran war may end in the coming few weeks, potentially turning the page on a torrid period for global markets.
Sovereign bonds rose around the world as concern the Middle East conflict will derail global economic growth revived demand for beaten-down government debt.
Sovereign bonds rose around the world as concern the Middle East conflict will derail global economic growth revived demand for beaten-down government debt.
The US Treasury building in Washington, DC, US, on Tuesday, Aug. 5, 2025. The US government plans to borrow $100 billion in a single Treasury debt sale this week, an unprecedented figure that showcases both the magnitude of its borrowing needs and its ability to attract investors. Photographer: Al Drago/Bloomberg
Trading in two-year German bond futures was halted twice on Monday, leaving traders struggling to keep up with swings triggered by US President Donald Trump’s decision to back down from strikes on Iran’s energy infrastructure.
Trading in two-year German bond futures was halted twice on Monday, leaving traders struggling to keep up with swings triggered by US President Donald Trump’s decision to back down from strikes on Iran’s energy infrastructure.
Traders boosted wagers on European Central Bank interest-rate hikes, fully pricing three quarter-point increases this year as rising energy prices fueled inflation worries.
Traders boosted wagers on European Central Bank interest-rate hikes, fully pricing three quarter-point increases this year as rising energy prices fueled inflation worries.
Christine Lagarde Photographer: Alex Kraus/Bloomberg
Traders are fully pricing two interest-rate hikes from the European Central Bank this year, as an attack on Iranian gas assets revives fears of an inflation spike.
Traders are fully pricing two interest-rate hikes from the European Central Bank this year, as an attack on Iranian gas assets revives fears of an inflation spike.
German bonds fell for a second day, sending government borrowing costs to the highest level since October 2023 on worries the war in Iran will stoke inflation further.
German bonds fell for a second day, sending government borrowing costs to the highest level since October 2023 on worries the war in Iran will stoke inflation further.
A sharp swing in European money markets from bets on central bank interest-rate cuts to hikes has caught traders off guard, forcing some to exit options at hefty losses.
A sharp swing in European money markets from bets on central bank interest-rate cuts to hikes has caught traders off guard, forcing some to exit options at hefty losses.
The European Central Bank headquarters in Frankfurt.
Just a month ago, European Central Bank President Christine Lagarde declared that inflation was in a “good place.” With Europe now hurtling toward another energy crisis, traders are struggling to figure out how bad it could get.
Just a month ago, European Central Bank President Christine Lagarde declared that inflation was in a “good place.” With Europe now hurtling toward another energy crisis, traders are struggling to figure out how bad it could get.
Prices at a petrol station in Saint-Leonard, northern France, on March 9. Photographer: Sameer Al-Doumy/Getty Images
Just a month ago, European Central Bank President Christine Lagarde declared that inflation was in a “good place.” With Europe now hurtling toward another energy crisis, traders are struggling to figure out how bad it could get.
Just a month ago, European Central Bank President Christine Lagarde declared that inflation was in a “good place.” With Europe now hurtling toward another energy crisis, traders are struggling to figure out how bad it could get.
Prices at a petrol station in Saint-Leonard, northern France, on March 9. Photographer: Sameer Al-Doumy/Getty Images
Just a month ago, European Central Bank President Christine Lagarde declared that inflation was in a “good place.” With Europe now hurtling toward another energy crisis, traders are struggling to figure out how bad it could get.
Just a month ago, European Central Bank President Christine Lagarde declared that inflation was in a “good place.” With Europe now hurtling toward another energy crisis, traders are struggling to figure out how bad it could get.
Prices at a petrol station in Saint-Leonard, northern France, on March 9. Photographer: Sameer Al-Doumy/Getty Images
Traders amped up bets on interest-rate hikes from the European Central Bank and the Bank of England as soaring energy prices fueled fears of an inflation spike.
Traders amped up bets on interest-rate hikes from the European Central Bank and the Bank of England as soaring energy prices fueled fears of an inflation spike.
European bonds fell and traders scaled back wagers on interest-rate cuts as they gamed out a familiar scenario: an energy supply shock that sends prices soaring and stokes inflation.
European bonds fell and traders scaled back wagers on interest-rate cuts as they gamed out a familiar scenario: an energy supply shock that sends prices soaring and stokes inflation.
Traders work on the floor of the New York Stock Exchange. Photographer: Michael Nagle/Bloomberg
The UK is expected to slash gilt sales in the coming year, a rare piece of good news for bond investors concerned about the country’s strained finances.
The UK is expected to slash gilt sales in the coming year, a rare piece of good news for bond investors concerned about the country’s strained finances.
Treasuries and the dollar retreated as demand for haven assets ebbed with renewed risk appetite lifting technology stocks higher.
Alberto Musalem, president of the Federal Reserve Bank of St. Louis, during a Bloomberg Television interview in Washington, DC, US, on Monday, Nov. 10, 2025. Musalem said he expects the US economy to bounce back strongly early next year, underscoring the need for officials to approach additional interest-rate cuts with caution.
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