For European bond traders, 2022 was the year the playbook that served them so well during the past decade was ripped to pieces. German and UK 10-year yields saw their biggest yearly surges on record, as sovereign bond markets were whiplashed by rampant inflation and uncertainty over how policy makers would respond to it. In a rare occurrence that marked a break with the era of negative interest rates and quantitative easing, implied volatility in euro-area rates surpassed that of the US, while trading costs in core European sovereign bond markets surged. The upheaval is ongoing. Inflation is still far from quashed ... (full story)