FX.co ★ Bund Yields Remain Close to Three-Month Lows

Germany’s 10-year Bund yield stood at 2.85% at the end of June, close to its lowest level since early March, as oil prices hovered around $70 a barrel and eased inflation concerns. The move comes ahead of the ECB’s Sintra Forum, where a key panel on Wednesday will bring together ECB President Christine Lagarde, newly appointed Fed Chair Kevin Warsh, and Bank of England Governor Andrew Bailey. Investors will be looking for signals on their assessment of the economic outlook and the trajectory of monetary policy. Since the interim US–Iran ceasefire led to the reopening of the Strait of Hormuz, both oil prices and inflation expectations have retreated, prompting markets to scale back expectations for the size of future rate hikes by the ECB and the Bank of England. Traders will also be scrutinizing fresh inflation data from the euro area’s largest economies later this week.