After a wave of sell-offs evoked memories of the Eurozone debt crisis 15 years ago, traders are on high alert for signs of contagion in the European government bond market. When financial pressure on one sovereign bond market spreads to other markets — even if this spread seems unwarranted — it can trigger chaotic price swings that worry central banks and force them to intervene in extreme situations. This is a typical characteristic of the 2011-12 Eurozone debt crisis. Jeff Mueller, co-head of fixed income at Morgan Stanley Investment Management, said: “We are beginning to see initial signs of contagion. If the sharp price fluctuation observed on October 1 continues for some time, this may be of concern to policy makers.”

After a wave of sell-offs evoked memories of the Eurozone debt crisis 15 years ago, traders are on high alert for signs of contagion in the European government bond market. When financial pressure on one sovereign bond market spreads to other markets — even if this spread seems unwarranted — it can trigger chaotic price swings that worry central banks and force them to intervene in extreme situations. This is a typical characteristic of the 2011-12 Eurozone debt crisis. Jeff Mueller, co-head of fixed income at Morgan Stanley Investment Management, said: “We are beginning to see initial signs of contagion. If the sharp price fluctuation observed on October 1 continues for some time, this may be of concern to policy makers.”