UK and European bonds sold off as yields rise and expectations of interest rate hikes increase

(1) On Wednesday, pressured by rising oil and natural gas prices, UK and European government bonds faced further sell-offs, with short-term yields leading the decline. (2) In terms of specific data, the UK 10-year government bond yield rose by 5 basis points to 5.23%, and the German 10-year government bond yield once increased by 5 basis points to 3.42%. (3) Market rate hike bets have increased accordingly. Currently, traders have priced in a cumulative 36 basis points of rate hikes by the Bank of England by the end of the year, and a cumulative 51 basis points by the European Central Bank; the market has fully priced in a total of 50 basis points of rate hikes by the Bank of England by February next year.