European Sovereign Debt Under Pressure as Traders Price in Further ECB Rate Hikes

European sovereign debt markets are experiencing significant pressure, with a relentless flattening of the yield curve, as traders increasingly price in expectations for further interest rate hikes from the European Central Bank (ECB) through early 2027. This follows the ECB's 25-basis-point rate increase last Thursday and precedes a wave of global monetary policy decisions, including the anticipated Federal Reserve rate hike.