FX.co ★ Bund Yields Steady After Tuesday’s Jump

The yield on Germany’s 10-year Bund hovered around 3.3% after Tuesday’s sharp rise, as investors were left searching for direction in the absence of major Eurozone data. Brent crude prices also halted their recent slide after shipping attacks in the Strait of Hormuz, while markets continued to absorb stronger-than-expected US inflation data. The inflation surprise reinforced expectations of further Federal Reserve tightening in December and raised the likelihood of a 50-basis-point rate hike. At the same time, ongoing political and fiscal strains in France, along with uncertainty surrounding a possible early departure of ECB President Christine Lagarde, continued to dampen sentiment across European markets. On the policy front, ECB Chief Economist Philip Lane indicated that another rate increase in December may be justified, adding to the growing chorus of officials backing a third hike this year.