ECB Rate Hike Looms Amid Oil Price Surge

Financial markets are bracing for the European Central Bank's second interest rate hike of the year, expected to be announced later today. The move comes as global bond markets continue to sell off due to rising oil prices and escalating Middle East tensions.

The ECB is widely expected to increase its benchmark rate by 25 basis points, with some traders pricing in a total of four hikes this year. This would take the key ECB rate to 2.74% by December, according to current market expectations.

Germany's 10-year bond yield has reached a post-2008 high of 3.43%, while France's OAT yield surged to 4.34%. The UK's 10-year and 20-year yields are also near record highs at 5.26% and 5.87% respectively.

Columbia Threadneedle's Global Head of Absolute Return Fixed Income, Keith Patton, said the key question for investors is whether the ECB has modeled the impact of further rate hikes on economic growth.