Economics
‘Snoozefest’ No Longer: Volatility Seizes Europe’s Bond Market
- German bonds are most turbulent on record by some metrics
- End of forward guidance, energy crisis are compounding moves
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One of the sleepiest debt markets in the world has woken up, ripping up the playbook for traders and companies alike.
Europe’s bond investors, caught between a central bank raising rates for the first time since 2011 and the prospect of a recession are braving some of the wildest swings on record by some metrics. The yield on Germany’s benchmark bond has oscillated 10 basis points on almost 80 days this year -- something that happened only once in 2021. Hedging costs across euro rates markets have soared.