FX.co ★ Bund Yields Hold Near 15-Year Highs as Oil Fuels Inflation Concerns

Germany’s 10-year Bund yield held near 3.38%, just below last week’s more than 15-year high of 3.3951%, as surging oil prices reinforced inflation worries ahead of this week’s European Central Bank meeting. Brent crude rose to a new six-week peak amid renewed US–Iran clashes and reports that Iran and Oman were close to an agreement on managing shipping through the Strait of Hormuz, stoking concerns over Tehran’s growing influence over the key maritime corridor. The increase in energy prices has intensified a global bond selloff, with persistent inflation pressures and resilient economic growth keeping central banks under pressure to sustain a restrictive policy stance. The ECB is widely expected to raise interest rates on Thursday, and markets are almost fully pricing in another increase by year-end. In the US, investors are awaiting key inflation figures later this week, after Friday’s strong jobs report pushed the implied probability of a Federal Reserve rate hike next week to nearly 60%.