Global Bond Rout Deepens Amid Tariff and Geopolitical Uncertainty
Financial markets remain on edge as traders navigate a landscape dominated by geopolitical tensions and shifting trade policies. The latest market turmoil comes as the US signals wavering support for Ukraine while delivering mixed messages on tariff policy. These uncertainties have fueled volatility across asset classes, with global bonds bearing the brunt. In Asia, the bond selloff accelerated on Thursday, mirroring a sharp decline in German bunds that saw 10-year yields surge by 31 basis points the largest single-day spike since 1990.
Euro Surges as ECB Decision Looms
The euro has staged its strongest three-day rally since 2015, supported by expectations ahead of the European Central Bank’s (ECB) monetary policy announcement later today. Market participants widely anticipate a quarter-point rate cut. The ECB’s decision will be critical for determining the euro’s near-term trajectory, especially as traders assess how policymakers will balance inflation risks against a slowing European economy.
Dollar Struggles as Market Awaits US Labor Data
The US dollar index remains under pressure after sliding 1% on Wednesday, weakening against most major currencies most notably the euro. Traders are now turning their attention to upcoming US economic data, with initial jobless claims set for release ahead of Friday’s pivotal nonfarm payrolls report. Any signs of labor market weakness could reinforce expectations of Federal Reserve rate cuts later this year, further shaping risk sentiment in global markets.