Bund Yield Hits 2011 High as Oil Surges Ahead of ECB
Germany’s 10-year Bund yield rose to 3.1%, its highest level since 2011, as oil prices surged due to the ongoing US blockade of Iran in the Strait of Hormuz, intensifying inflation concerns ahead of the European Central Bank’s meeting later today. Brent crude reached fresh four-year highs following reports that the US is considering further military action in Iran. While the ECB is expected to hold rates steady on Thursday, markets are pricing in three quarter-point hikes in 2026, driven by inflationary pressures from the oil shock tied to the Iran conflict. Recent data from Europe’s largest economies showed inflation accelerating in April, fueled by soaring energy prices. This follows the Federal Reserve’s decision to maintain rates, though its meeting revealed growing divisions, with four officials dissenting for the first time since October 1992, three of whom opposed the Fed’s guidance suggesting future rate cuts.

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