European and UK Bonds Surge as Traders Scale Back Interest Rate Hike Bets

Government debt in the United Kingdom and the Eurozone recorded its strongest daily performance since 2023 as traders scaled back bets on further rate hikes by the ECB and Bank of England (BoE). This shift led to a widespread repricing of sovereign debt, pushing bond prices higher and yields on German and UK benchmarks lower. Meanwhile, U.S. Treasury yields held steady early Thursday as investors adopted a 'wait-and-see' approach ahead of critical inflation data. This stability in the U.S. market reflects caution before economic releases that could dictate the Fed's next policy moves. While fiscal concerns in France persist, the broader market focus has shifted toward the perceived peak of the monetary tightening cycle. This surge reflects a major adjustment in the global yield curve as aggressive rate hike cycles appear to be nearing their end.