FX.co ★ Italy’s 10-Year BTP Yield Rises From 1-Year Low

Italy’s 10-year BTP yield rose above 3.3%, rebounding from Friday’s one-year low of 3.276%, as mounting tensions in the Middle East rattled global markets and led investors to scale back expectations for interest rate cuts by major central banks amid renewed inflation concerns. Over the weekend, the US and Israel launched strikes on Iran, reportedly killing Iran’s Supreme Leader and effectively shutting the Strait of Hormuz. Iran retaliated with missile and drone attacks.

The resulting spike in oil and gas prices has intensified fears of a resurgence in inflationary pressures across Europe, where gas inventories remain unusually low and will require significant replenishment ahead of next winter. Investors are also closely watching key economic releases this week, including the flash Eurozone and Italian CPI data for February.