Bond investors already compelled to scrap expectations for a great divergence in global monetary policies this year are now rethinking the direction in which major central banks will converge.
Traders are fast adding to bets that the Federal Reserve will raise interest rates before year-end amid strengthening economic data. At the same time, speculation is mounting for the European Central Bank and the Bank of Japan to taper their asset-purchase programs. Last month, the consensus in markets was these authorities would maintain easier policies for longer. An index of developed-market sovereign debt has swung to the lowest since July from an almost three-week high on Sept. 26, before the ECB releases minutes of its September meeting.