Bund Yields at 17-Year High as Rate-Hike Bets Rise
Germany’s 10-year Bund yield climbed back above 3.6%, its highest level since June 2009, as elevated energy prices fuel concerns over renewed inflationary pressure and hawkish central-bank signals push up rate expectations. Brent crude rose above $106 a barrel amid fading optimism over progress in US-Iran talks. Iran said it would not soften its conditions for reopening the Strait of Hormuz after President Trump rejected its proposal. Speaking to Axios, Trump said Iran had “overplayed its hand” and that he expected negotiations to resume this week. Money markets are now pricing in roughly 100 basis points of ECB rate hikes by late 2027. Investors in the US and UK have similarly increased bets on further monetary tightening following hawkish comments from policymakers and data pointing to resilient growth. Meanwhile, concerns over debt affordability in heavily indebted economies, particularly France and Italy, have added to pressure on European bonds ahead of elections next year.
6%, its highest level since June 2009, as elevated energy prices fuel concerns over renewed inflationary pressure and hawkish central-bank signals push up rate expectations. Brent crude rose above $106 a barrel amid fading optimism over progress in US-Iran talks. Iran said it would not soften its conditions for reopening the Strait of Hormuz after President Trump rejected its proposal. Speaking to Axios, Trump said Iran had “overplayed its hand” and that he expected negotiations to resume this week.
Money markets are now pricing in roughly 100 basis points of ECB rate hikes by late 2027. Investors in the US and UK have similarly increased bets on further monetary tightening following hawkish comments from policymakers and data pointing to resilient growth. Meanwhile, concerns over debt affordability in heavily indebted economies, particularly France and Italy, have added to pressure on European bonds ahead of elections next year.