FX.co ★ Bund Yield Holds Near Multi-Year High Ahead of ECB Meeting

Germany’s 10-year Bund yield was little changed just above 3.15% on Wednesday, hovering near the multi-year peak of 3.2% reached in May. Investors remained cautious ahead of Thursday’s European Central Bank policy decision and amid rising tensions in the Middle East. The ECB is widely expected to keep interest rates on hold after its June increase, as policymakers proceed carefully in the face of mixed economic data and elevated geopolitical risk. Nonetheless, markets are still pricing in around two additional rate hikes by year-end, with the next move potentially in September. At the same time, worries that conflict in the Middle East could disrupt global oil supply are keeping inflation concerns in focus. Brent crude rose to its highest level in more than a month after US President Donald Trump ruled out near-term talks with Iran, warned of further military action, and vowed to respond if Iran-backed Houthi rebels in Yemen interfere with shipping in the Red Sea.