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.
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.
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.
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.
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.
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.
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.
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.
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.
Traders increased their bets on more Bank of England interest-rate cuts after UK unemployment approached the highest level in five years and wage growth cooled.
Traders increased their bets on more Bank of England interest-rate cuts after UK unemployment approached the highest level in five years and wage growth cooled.
Treasuries surged in the day leading up to the US government’s belated reading of labor-market data, with investors pricing in a greater chance that the Federal Reserve lowers interest rates multiple times this year.
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