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Europe’s Bruised Bond Markets Signal There’s More Pain in Store

  • Yields rise with hedging costs in sign of deepening bond rout
  • BNP says investors are keen to buy insurance on higher rates
The European Central Bank (ECB) headquarters building in Frankfurt.

The European Central Bank (ECB) headquarters building in Frankfurt.

Photographer: Alex Kraus/Bloomberg

Europe’s bond markets are sending a signal that the latest selloff may be far from over.

Hedging costs are rising in tandem with bond yields as anxious traders prepare for the rout to get worse. It’s the first time that’s happened since 2016, when the European Central Bank rocked the market by announcing it would begin to scale back its bond-buying program.