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The reform of the Dutch pension system may result in a selloff in long-maturity bonds and interest-rate swaps, the European Central Bank (ECB) warned Wednesday.The ECB wrote in its Financial Stability Review that demand for these securities will drop as Dutch pension funds shift from a defined benefit to a defined contribution model to better suit the needs of an aging population.While the changes have been well-flagged and are playing out over several years, the Dutch pension system has a large footprint in European rates markets. It accounts for about 65% of euro area pension funds’ sovereign bond holdings, according to the ECB.Shifts in demand for bonds are in particular focus given the pivot among European governments toward bigger defence and infrastructure spending, against a backdrop of higher debt sales globally. Long-maturity yields rose to multi-year peaks around the world earlier in 2025 amid bouts of volatility.With central banks — including the ECB — shrinking the bond portfolios accumulated during the years of quantitative easing, there’s now greater impetus on private buyers to absorb the supply hitting the market.“There is lower demand for longer-dated debt from some institutional investors, notably Dutch pension funds,” the ECB wrote in Wednesday’s report. “As a result, investors may require higher yields to absorb new issuance or a compressed maturity profile.”So far, a repricing in the euro swaps curve has been orderly. Still, the ECB is not the only market observer to warn of potential price swings as the transition advances.The Dutch central bank has said it’s working with the sector “to ensure a smooth and careful transition,” while Bank of America Corp has said it will keep trading desks fully staffed over the end-of-year period to be ready for potential volatility.The transition will be split across the next two years. The early part of 2026 is seen as a key test with about 35% of the Dutch pension sector’s assets due to switch over, according to BNP Paribas SA analysis. Total assets under management are about €1.9tn ($2.2tn), according to Dutch central bank data.The funds will also have less need for long-dated interest-rate hedges under the new system. Bets on a steeper curve — where long-end yields rise more than the shorter ones — was a popular bet for much of this year as investors positioned to profit from the Dutch shift.“This year’s surge in long-dated euro-area swap rates looks set to continue into 2026 after the European Central Bank added a note of caution about the impact of the Dutch pension-fund reform. ...The reform will see funds transitioning to asset allocations that have a shorter interest-rate hedge, leading to reduced demand for long-dated bonds and swaps and possibly increasing volatility in the market for long-term financial instruments,” says Ven Ram, Macro strategist at Bloomberg.The steepening move petered out in October amid doubts over the number of funds ready to change to the new system and their hedging requirements. But it has picked up again in recent weeks, a development that strategists have attributed to more Dutch pension funds getting the green light from regulators to make the switch.The gap between 10- and 30-year interest-rate swaps is around 32 basis points, the highest since 2021. It started the year around minus 20 basis points. 

The US dollar index, which measures the performance of the US currency against the euro, the British pound, the yen, and three other major currencies, stabilized at 100.18 after rising to 100.25, its highest level since August 1. Both the Japanese yen and the US dollar attracted strong demand as safe-haven assets amid heavy selling in stocks, particularly technology shares on Wall Street, which extended to Asian markets.The yen rose by about 0.2% to 153.42 per dollar, continuing the gains of 0.7% it recorded on Tuesday. At the same time, the dollar was steady at 1.1483 against the euro after rising 0.3% in the previous session to reach a seven-month-high.The British pound stabilized at $1.3016 after falling 0.9% yesterday. The New Zealand dollar slipped 0.1% to $0.5635 after a 1.2% decline yesterday, touching its lowest level in seven months. It also fell to 1.1512 against the Australian dollar following labor market data, a level not seen since October 2013.The Australian dollar dropped 0.2% to $0.6476.

The dollar steadied on Tuesday, as US President Donald Trump softened his tone on tariffs toward China, and hopes grew for a possible meeting with his Chinese counterpart, which gave a boost to expectations of easing tensions between the world's two largest economies. The euro remained below USD 1.16, trading at USD 1.1566. The British pound fell 0.06 percent to USD 1.3328, while the New Zealand dollar fell again, touching a six‑month low at USD 0.57145. The dollar index, which measures the performance of the US currency against a basket of currencies, rose 0.04 percent to 99.34 points. The Australian dollar remained almost unchanged at USD 0.6516, whereas the Japanese yen declined 0.2 percent to 152.57 per dollar.

The dollar took a breather on Thursday after a strong run this week that has put it on track for its best performance in nearly a year, helped by a weak yen that has struggled amid a change of guard in Japan's ruling party. The Japanese currency was last a touch stronger at 152.49 per dollar, after having slid to an eight-month low of 153 per dollar overnight. The euro is also under pressure due to the escalating political crisis in France following the shocking resignation of Prime Minister Sebastien Lecornu and his government, although French President Emmanuel Macron is expected to appoint a new prime minister within 48 hours. The moves in the yen and the euro have in turn provided support for the dollar, which is up more than 1% for the week. Sterling rose 0.07% to $1.3413, after having touched a roughly two weeks previous session, while the Australian dollar was last up 0.11% at $0.6594. The New Zealand dollar rose 0.1 % to $0.5792, after falling in the previous session following the Reserve Bank of New Zealand's 50 basis point interest rate cut. Against a basket of currencies, the dollar was little changed at 98.77.

The dollar sank to a one-week low versus major peers on Wednesday as the US government entered a shutdown that is likely to delay the release of crucial jobs data. The dollar index, which gauges the currency against six counterparts including the euro and yen, declined 0.2% to 97.635, and earlier dipped to 97.584 for the first time since last Wednesday. The euro rose as much as 0.3% to $1.1767, the highest since September 24. The dollar slipped 0.3% to touch 147.46 for the first time since September 19, adding to a three-day, 1.2% slide.

The Israeli occupation army has ramped up its military operations in the Al Mawasi area of southern Gaza, converting what was euphemistically known as a "humanitarian zone" into a lethal trap to lure the Palestinians and destabilize any place where they are present, transforming any shelter into a target within an extermination campaign that aims to efface Gazans, Euro-Mediterranean Human Rights Monitor (Euro-Med Monitor) has reported.In a statement, Euro-Med Monitor confirmed that the occupation army directly launched firepower at the tents of the displaced people in Al Mawasi, resulting in unnecessary casualties in a daily repeated crime.It stressed that this Israeli firepower is unnecessary for military or security reasons. The displaced tents are coming under precision attack from snipers in this area, as well as air raids and oftentimes artillery shelling. "This area is euphemistically alleged to be a humanitarian zone, and over a million people are ordered to head to this area, the statement continued.The statement further explained that Euro-Med Monitor's legal team has documented repeated incidents of displaced tents being targeted directly throughout the past few days, which resulted in killing dozens of civilians and wounding others with varying degrees of injuries, in addition to destroying their tents and their remaining personal belongings in this last-resort area.The legal team has been monitoring multiple footage showing Israeli forces firing on Palestinians in displacement tents for amusement or competitive targeting. The footage indicates that the firepower was not zeroed in on a specific military target nor justified by any security or operational necessity, but rather exposes a deliberate pattern aimed at maximizing civilian casualties, destroying property, and eroding any sense of safety, the statement stressed. The team asserted that alongside the recorded gunfire, there have been dozens of incidents in which the displaced persons' tents were subjected to aerial and artillery strikes from Israeli gunboats or tanks, targeting civilians within so-called "humanitarian zones," which is literally a deliberate policy aimed at obliterating the very concept of protection, turning places that are supposed to serve as safe havens into hunting and bombardment grounds, where the displaced face the risk of direct killing or slow death from starvation, disease, and the collapse of the health system.Euro-Med Monitor warned against using displacement as a double weapon, stressing that thousands of families in Al Mawasi are experiencing extremely tough humanitarian conditions that lack the simplest life elements, amid a severe shortage of food, fresh water, and medicines, thereby exacerbating health risks and exposing the residents to epidemics and contagious diseases.Many of those displaced people are forced to live either in dilapidated tents or in the open without protection from heat, cold, or rain, amid an aggravated tribulation of children, the elderly, and women due to the lack of essential medical care and services, as these tents continue to punch way above their weight in the midst of no sanitation networks, making them incredibly unlivable and threatening the lives of thousands with slow death, Euro-Med Monitor warned. Euro-Med Monitor further explained that the continuation of this policy lays bare the fact that the Israeli occupation army is bent upon subjecting Gazans to only one of these options: either to die quickly through bombing and direct targeting, or die slowly through deliberate starvation and deprivation of key life essentials.It stressed that these acts are tantamount to a crime of genocide based on international law and expose a methodical orientation to imposing living conditions that aim to decapitate the Palestinians entirely or partially.