The global bond market is experiencing a “domino effect” sell-off!
On June 5th, the European Central Bank lowered interest rates as expected, but ECB President Christine Lagarde’s statements completely changed market expectations. She clearly stated that the central bank is approaching the end of the monetary policy cycle and may raise future growth forecasts, which instantly prompted traders to reposition.
As the market quickly digested the expectation that the ECB might pause its easing measures, the two-year government bond yields of most Eurozone member countries rose by at least 5 basis points. Following the sell-off in U.S. and Japanese bonds, the European bond market also faced a wave of selling.
Analysts point out that the contagious nature of this round of global bond market sell-off is worth noting. Although the U.S. bond market rose on Wednesday due to weak employment data raising expectations for a Federal Reserve rate…
