FX.co ★ Germany’s 10-Year Bund Yield Highest Since 2011

Germany’s 10-year Bund yield climbed above 3%, its highest level since July 2011, as the US–Israel–Iran war entered its fourth week and surging energy costs stoked expectations of multiple ECB rate hikes in 2026. Oil prices spiked after Iran threatened retaliatory strikes on Israeli power plants and facilities supplying US bases in the region, following President Trump’s ultimatum to “obliterate” Iran’s energy infrastructure if the Strait of Hormuz remains closed. The abrupt escalation—coming just days after Trump said the conflict was “winding down”—led traders to price in at least three ECB rate increases this year. The central bank, which kept rates unchanged last week, raised its inflation forecasts and cut growth projections, warning that risks stemming from the Middle East crisis are intensifying.