Themes
The big picture
What has driven rates, country by country, and how traders express it. Updated 18 Oct 2026.
The past 12 months · 18 Oct 2025 – 18 Oct 2026
A war-driven energy shock turned a rate-cutting cycle into a hiking cycle, and pushed long-end yields to multi-decade highs.
A year ago the Fed and the BoE were still cutting, the ECB was on hold at 2% and the BoJ sat at 0.5%. The Iran war, which began on 28 February, sent Brent above $126 and pushed inflation forecasts up, so the Fed, ECB and BoJ all hiked and the BoE has a November hike priced. Long-end yields went further still, to their highest in decades in the US, UK and Japan and since 2011 in Germany, as inflation risk, heavy supply and fiscal worries rebuilt term premium, the extra yield for lending long. Japan is the outlier: its curve steepened as the BoJ left ultra-low rates behind.
3 themes
- BuildingUS · Euro area · UK · Japan
The cycle turned: from rate cuts to rate hikes
The war flipped the cycle from cuts to hikes, so the front end did the repricing and curves bear-flattened before the hikes even arrived.
2y yields higher10–30y yields higherCurve flatter - PeakingUS · UK · Euro area · Japan
Term premium returns: long yields at multi-decade highs
Hikes explain the front end; long yields at multi-decade highs are a term-premium story of inflation risk, supply and fiscal worries.
2y yields higher10–30y yields higherCurve mixed - BuildingJapan
Japan leaves ultra-low rates behind
The BoJ is normalising in small steps from a very low base, so the JGB curve steepens while the long end prices the risks.
2y yields higher10–30y yields higherCurve steeper
Themes are written by the JuniorTrader desk from the sources each one links. Trade ideas are educational expressions of a view — how a desk might position — not recommendations. Market levels are as reported on the dates shown.