Bund Yields Slip Toward April Lows on Middle East Ceasefire Hopes

2026-05-28 14:43 By Joana Ferreira 1 min. read

German 10-year Bund yields reversed earlier gains to fall back toward 2.96%, nearing their lowest level since April 8, as easing oil prices helped soften inflation concerns amid renewed optimism over Middle East diplomacy.

According to Axios, US and Iranian negotiators have reportedly agreed on a 60-day memorandum of understanding to extend a ceasefire and begin talks on Iran’s nuclear program, although final approval from President Trump has yet to be secured.

While the news lent some support to broader risk sentiment, geopolitical tensions remain elevated.

Meanwhile, investors focused on the latest European Central Bank minutes, which revealed that several policymakers viewed the April decision to keep rates unchanged as a close call, with some suggesting they would have supported a hike if it had been on the table.

Money markets are now nearly fully pricing in a 25-basis-point rate hike on June 11, with at least one additional increase expected by year-end.



News Stream
Bund Yields Slip Toward April Lows on Middle East Ceasefire Hopes
German 10-year Bund yields reversed earlier gains to fall back toward 2.96%, nearing their lowest level since April 8, as easing oil prices helped soften inflation concerns amid renewed optimism over Middle East diplomacy. According to Axios, US and Iranian negotiators have reportedly agreed on a 60-day memorandum of understanding to extend a ceasefire and begin talks on Iran’s nuclear program, although final approval from President Trump has yet to be secured. While the news lent some support to broader risk sentiment, geopolitical tensions remain elevated. Meanwhile, investors focused on the latest European Central Bank minutes, which revealed that several policymakers viewed the April decision to keep rates unchanged as a close call, with some suggesting they would have supported a hike if it had been on the table. Money markets are now nearly fully pricing in a 25-basis-point rate hike on June 11, with at least one additional increase expected by year-end.
2026-05-28
Bund Yields Surge Above 3% as US-Iran Tensions Fuel Inflation Fears
German 10-year bund yields climbed back above 3% as escalating US-Iran tensions threatened their ceasefire, driving oil prices higher and stoking inflation concerns. This also heightened expectations for European Central Bank rate hikes this year. A Washington official confirmed US strikes on an Iranian drone operation near the Strait of Hormuz, following reports that President Donald Trump had rejected a potential compromise with Tehran. In retaliation, Iran’s Revolutionary Guard targeted a US airbase on Thursday. Regional instability deepened further as Kuwait reported countering hostile drone and missile threats. Money markets responded by increasing bets on ECB tightening, pricing in nearly 65 basis points of hikes this year, up from just under 60 basis points late Wednesday.
2026-05-28
German Bund Yields Slide Toward Seven-Week Low
German 10-year bund yields slipped toward 2.95%, approaching their lowest level since April 8, amid growing optimism over a potential US-Iran peace deal. Investors remain focused on Middle East developments, heartened by the recent absence of negative signals from both sides and lingering hopes that an agreement to ease tensions and reopen the Strait of Hormuz could still be achieved despite recent strikes. Money markets now anticipate the ECB deposit rate at 2.6% by December, up from the current 2% but below last week’s expectation of 2.75%, with an 80% probability of a first rate increase next month. Meanwhile, ECB official Isabel Schnabel told Reuters the central bank should raise interest rates in June even if a peace deal materializes, pointing to the scale and persistence of the energy shock.
2026-05-27