The yield on Germany's 10-year Bund held near 3.15%, hovering close to a two-month high, as rising oil prices offset optimism about a potential resumption of US-Iran peace talks after recent escalations. Ongoing tensions in the Middle East continue to fuel concerns about possible disruptions to oil supplies, which could stoke inflation in Europe, a net energy importer. This backdrop has strengthened expectations that the European Central Bank will implement two additional rate hikes by early 2027, with the first possibly arriving as soon as September. Markets are now turning their attention to Thursday’s ECB policy meeting. Following June’s first rate increase in three years, the central bank is widely expected to leave rates on hold while preserving a cautious, data-dependent approach.