Germany’s 10-year Bund yield has risen above 3.1%, its highest level since May 2011, and is set to end March nearly 50 basis points higher. The conflict with Iran has pushed energy prices higher and led investors to abandon expectations of ECB rate cuts, with traders now pricing in at least two rate hikes in 2026 and potentially a third. Geopolitical tensions have escalated as US President Donald Trump extended his deadline for Iran to reopen the Strait of Hormuz or face military strikes, while reports from Washington and Tehran offered conflicting assessments of progress in the talks. Although German Foreign Minister Johann Wadephul confirmed ongoing indirect contacts and announced upcoming direct negotiations in Pakistan, markets remain unconvinced of a near-term breakthrough, viewing the extended deadline as a move to allow additional troop deployments.