Euro zone bond yields rise as oil climbs, inflation data in focus
Germany's 10-year yield was around its highest level since June 2009, while the 2-year yield was on course for its biggest monthly rise since March. Flash euro zone inflation data due later this week is expected to show an acceleration in September.
German 10-year yield around highest level since 2009 On track for a monthly increase of about 31 basis points Flash data seen showing pick in euro zone inflation in September (Adds quote, updates pricing) By Sophie Kiderlin LONDON, Sept 28 (Reuters) — Euro zone government bond yields rose on Monday at the start of a week packed with key economic data, as oil prices climbed on doubts that the US-Iran conflict will be resolved soon and that the Strait of Hormuz will reopen. 6416%, around its highest level since June 2009. The yield recorded a seventh consecutive weekly increase last week and is on track for a monthly rise of more than 31 bps.
US President Donald Trump at the weekend rejected an Iranian proposal to reopen the Strait of Hormuz and end hostilities. 50 a barrel. Rising energy prices and expectations of higher interest rates have kept pressure on government bonds globally in recent months. The European Central Bank has already raised rates twice this year to combat inflation, and money markets are pricing in at least one further increase by year-end.
Looking ahead to October 2027, they are pricing in roughly 100 bps of further tightening. After data last week again pointed to unexpected economic resilience in the euro zone, attention now turns to flash inflation figures due later this week that could reshape interest-rate expectations. 2% in August, according to a Reuters poll. Nomura senior European economist Andrzej Szczepaniak said he would be "very unsurprised to see a jump in headline inflation", citing data showing higher vehicle fuel prices amid elevated oil costs.
"For me, the key focus really is the extent to which you see a further firming in core goods prices," he said, adding that this would indicate the extent to which producers are passing on higher costs from elevated energy prices to consumers. Services inflation, another closely watched measure for policymakers, is unlikely to change significantly, Szczepaniak said. He added that service-sector prices are unlikely to rise materially until wage growth accelerates. 3196%.
The yield posted its seventh straight weekly gain last week and is on course for a monthly increase of about 40 bps, its biggest rise since March, shortly after the Iran war began in late February. 6132%. (Reporting by Sophie Kiderlin. com)