Germany’s 10-year Bund yield climbed to 3.06%, approaching its highest level since 2011, after the European Central Bank (ECB) reported a sharp rise in inflation expectations for March. According to the ECB’s latest consumer survey, prices are now expected to increase by 4% over the next 12 months, up from 2.5% in February. This jump has reignited worries about persistent inflation and the possible need for tighter monetary policy.
Although the ECB is widely expected to keep interest rates unchanged at its meeting on Thursday, markets are still pricing in at least two 25-basis-point rate hikes in 2026. Inflation concerns are being further stoked by energy markets, with Brent crude trading above $110 per barrel following reports that US President Donald Trump rejected an Iranian proposal to postpone nuclear talks until the current conflict and shipping disruptions are resolved.
Against this backdrop, investors are bracing for a data-heavy week, with key releases ahead, including flash estimates for Eurozone inflation and GDP.