FX.co ★ Bund Yield Nears 15-Year High as ECB Rate Hike Looms

Germany’s 10-year Bund yield hovered just below 3.4%, its highest level since April 2011, as investors looked ahead to Thursday’s European Central Bank policy meeting. Policymakers are widely expected to raise interest rates while reiterating their data-dependent stance, with the ongoing war involving Iran adding to uncertainty around the inflation outlook. Brent crude briefly touched $100 a barrel for the first time since July 24, and European natural gas prices rose to fresh three-and-a-half-year highs as escalating tensions in the Middle East intensified concerns over energy supplies and reignited inflationary pressures. Markets are now pricing in two ECB rate hikes in 2026, with the deposit rate projected to reach 3% by late 2027. A Reuters poll published on September 3 indicated that the ECB was expected to raise rates on Thursday for a second time, likely concluding what would be its shortest tightening cycle in 15 years.