German 10-Year Bund Yield Approaches 15-Year High

Germany’s 10-year Bund yield rose to 3.198%, approaching the 15-year high above 3.2% reached in July, as higher oil prices revived concerns over inflation. US President Donald Trump’s tougher demands on Iran have clouded prospects for an agreement to reopen the Strait of Hormuz, pushing crude prices higher and adding to inflationary pressures. Trump called for compensation from Tehran, while Iran has reiterated demands for reparations as part of negotiations to end the conflict. Meanwhile, the European Central Bank left rates unchanged in July after a 25-basis-point hike in June, its first increase in three years. German government bonds have outperformed US Treasuries as investors favor European markets amid improving economic momentum and greater clarity over ECB policy. Investors are also increasingly concerned about uncertainty surrounding Federal Reserve policy and the US fiscal outlook, further strengthening the appeal of European bonds.




