Bund Yields Steady as ECB Rate Hike Bets Offset Geopolitical Uncertainty

Germany’s 10-year Bund yield held near 3.15% on Tuesday as investors weighed a rebound in oil prices against expectations for further European Central Bank tightening. Oil recovered after Monday’s sharp selloff, while uncertainty over the US-Iran conflict persisted despite improved sentiment after US President Donald Trump called off planned strikes on Iran, signaling that a diplomatic solution remained possible. Tehran, however, denied any ongoing or planned negotiations. Meanwhile, stronger-than-expected eurozone data reinforced expectations that the ECB could raise interest rates at its next meeting. The bloc’s economy expanded 0.4% in the second quarter, twice the consensus forecast and the fastest pace since early 2025. Annual inflation also accelerated to 2.9% in July, with core and services inflation strengthening further.



