Original title: A €2 Trillion Dutch Pension Headache Is Coming for European Bonds
There’s a near €2 trillion ($2.3 trillion) upheaval coming for European bond markets to cap a 2025 already marked by tariff twists and turns, deficit worries and now a political crisis in France. The storm is centered on a long-planned reform of the Dutch pension system, the European Union’s biggest. It’s already pushing up yields on longer-dated bonds and traders are positioning for volatility in the euro swaps market, which the funds use for hedging. Things could become more extreme at the turn of the year, when a large tranche of funds are set to transition, due to lower liquidity at that time.