Bigger threat for Europe’s debt

Big sell-off: Lagarde has tried to push back on expectations for the eurozone but sharp moves in long maturity debt from Germany to the likes of Deutsche Bahn AG and Nestle SA are bringing into question the ‘haven’ status of these securities. — Reuters

BRUSSELS: Investors in European bonds are heading into this rate-hike cycle more vulnerable than they’ve ever been before, suggesting that the painful sell-off of recent weeks could be only the beginning.

Bonds have tumbled this month as the highest inflation in decades spurs traders and bank analysts to outdo each other in betting on ever more hikes from the Federal Reserve and European Central Bank (ECB). The latter is now seen taking its key rate back to 0% this year.