FX.co ★ Germany’s Bund Yields Ease but Post Biggest Monthly Jump Since 2022

Germany’s 10-year Bund yield slipped to 3%, retreating from multi‑year highs as investors reassessed growth risks stemming from the energy shock linked to the Middle East conflict. Even so, the benchmark yield remained on course to end March up 37 basis points — the steepest monthly rise since late 2022 — against the backdrop of a broad-based surge in inflation.

Soaring energy prices pushed Eurozone inflation to 2.5% and Germany’s EU-harmonized rate to 2.8%, both above the ECB’s 2% target and the highest levels in more than a year. The data prompted markets to abandon expectations for imminent rate cuts, with investors now pricing in at least two ECB rate hikes by 2026.

ECB policymaker François Villeroy de Galhau reaffirmed the central bank’s resolve to bring inflation under control but cautioned that it was still too early to discuss the precise timing of future rate moves.