Euro Soars, Bonds Slide as Traders Add Bets on ECB Hikes in 2022
- Italian bonds lead declines and traders reprice policy path
- Short-dated bonds fall, five-year Geman yields near zero
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Traders brought forward wagers for interest-rate hikes from the European Central Bank, lifting the common currency and spurring a selloff across the region’s bond markets.
Money markets are betting the ECB will deliver a total of 40 basis points of hikes through December, compared with 25 basis points on Wednesday. The repricing comes as President Christine Lagarde said risks to the inflation outlook were tilted to the upside and didn’t repeat earlier statements that interest-rates hikes are unlikely in 2022.