U.S. political strategist James Carville famously said he would like to be reincarnated as the bond market because “you can intimidate everyone.” So when bond yields start signaling a problem, the whole market listens.
The escalatory rhetoric around the war in the Middle East has led to what Deutsche Bank is calling “the most hawkish central bank pricing of the year so far for both the [European Central Bank] and the Fed.”
Last week, sovereign bonds sold off across the board, with Europe as the epicenter. 10 year bunds
hit their highest level since October 2023, while France’s 10 year OAT
yield rose to highs not seen since the European debt crisis of 2011. U.K. gilts
