Money markets are paring their bets for central bank tightening in 2022. The BoE is now seen lifting rates by a further 107bps versus 128bps on Monday. The ECB is now seen lifting rates just 20bps versus 25bps earlier in the day.

European bond markets reflect such sentiment. 2-year German yields are down north of 20bps on Tuesday to back under -0.70% while 2-year UK yields are down around 18bps to under 0.90%. 10-year German yields are also down about 20bps to well back below 0.00% while the UK 10-year yield is down about 22bps to back under 1.20%. 

Russia's invasion of Ukraine and the subsequent harsh sanctions enacted on it by the West have sparked fears of economic weakness as a result of fears of Russian energy and other commodity supply disruptions. This is leading market players to drastically dial back on expectations for central bank tightening in the medium term.