Bund Yields Rise as US-Iran Tensions Boost Oil

2026-06-01 09:36 By Joana Ferreira 1 min. read

German 10-year Bund yields climbed back to 2.98% at the start of June, rebounding from two-month lows touched last week, as oil prices surged amid escalating US-Iran tensions.

Both nations continued exchanging strikes, with Iran targeting a US airbase linked to an attack on a Sirik Island telecommunications tower, while both sides invoked "self-defense." Over the weekend, they exchanged proposals to revise a draft deal to extend the ceasefire and reopen the Strait of Hormuz, though progress remained unclear.

Economically, German retail sales fell in April for a fourth consecutive month, though the decline was slightly less than expected.

Markets now await the Eurozone inflation report this week, after May data showed EU-harmonized inflation accelerated in France, Italy, and Spain, while Germany saw a slowdown.

ECB minutes also revealed some policymakers would have backed an April rate hike, reinforcing expectations of a 25-basis-point increase at the June 11 meeting.



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Bund Yields Rise as US-Iran Tensions Boost Oil
German 10-year Bund yields climbed back to 2.98% at the start of June, rebounding from two-month lows touched last week, as oil prices surged amid escalating US-Iran tensions. Both nations continued exchanging strikes, with Iran targeting a US airbase linked to an attack on a Sirik Island telecommunications tower, while both sides invoked "self-defense." Over the weekend, they exchanged proposals to revise a draft deal to extend the ceasefire and reopen the Strait of Hormuz, though progress remained unclear. Economically, German retail sales fell in April for a fourth consecutive month, though the decline was slightly less than expected. Markets now await the Eurozone inflation report this week, after May data showed EU-harmonized inflation accelerated in France, Italy, and Spain, while Germany saw a slowdown. ECB minutes also revealed some policymakers would have backed an April rate hike, reinforcing expectations of a 25-basis-point increase at the June 11 meeting.
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German 10-year Bund yields dipped toward 2.9% at the end of May, touching their lowest level since mid-March and heading for a 10-basis-point monthly decline. Cautious optimism over a potential US-Iran agreement helped ease inflation concerns, as negotiations to end the three-month war continued. Reports suggested Washington and Tehran had agreed on a 60-day ceasefire extension to allow formal talks, though President Trump has yet to approve it. Investors also analyzed fresh inflation data from Europe’s largest economies for clues on the ECB’s policy direction. German EU-harmonized inflation eased in May despite higher energy prices linked to the Iran war. Meanwhile, inflation rates in France, Spain, and Italy accelerated to multi-year highs, all exceeding the ECB’s 2% target. ECB meeting minutes revealed some policymakers would have supported an April rate hike if proposed, reinforcing expectations of a 25-basis-point increase at the June 11 meeting.
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