Bund Yields at Over Two-Week High on Inflation Fears

2026-06-08 08:08 By Joana Ferreira 1 min. read

German 10-year Bund yields climbed above 3.05%, reaching their highest since May 21, as traders nearly fully priced in three European Central Bank rate hikes this year.

Fading hopes for a swift reopening of the Strait of Hormuz, combined with a over 4% surge in Brent crude after Iran and Israel exchanged missile strikes, fueled the shift.

This occurred despite President Trump’s calls for de-escalation.

With the ECB policy meeting approaching, a 25 basis point rate increase is widely expected.

The move follows euro-area inflation rising to 3.2% in May, its highest in over two and a half years.

However, uncertainty remains after Eurozone GDP figures were revised to show a contraction in Q1 2026, the first since late 2022 and the steepest since mid-2020.

Money markets now price the ECB deposit rate at around 2.7% by December, up from the current 2%, and indicate a near-certain first rate rise this month, followed by a second in September.



News Stream
Bund Yields at Over Two-Week High on Inflation Fears
German 10-year Bund yields climbed above 3.05%, reaching their highest since May 21, as traders nearly fully priced in three European Central Bank rate hikes this year. Fading hopes for a swift reopening of the Strait of Hormuz, combined with a over 4% surge in Brent crude after Iran and Israel exchanged missile strikes, fueled the shift. This occurred despite President Trump’s calls for de-escalation. With the ECB policy meeting approaching, a 25 basis point rate increase is widely expected. The move follows euro-area inflation rising to 3.2% in May, its highest in over two and a half years. However, uncertainty remains after Eurozone GDP figures were revised to show a contraction in Q1 2026, the first since late 2022 and the steepest since mid-2020. Money markets now price the ECB deposit rate at around 2.7% by December, up from the current 2%, and indicate a near-certain first rate rise this month, followed by a second in September.
2026-06-08
Bund Yields Rise on Fed, ECB Rate Hike Expectations
German 10-year Bund yields climbed to 3.04%, tracking US Treasury yields higher after stronger-than-expected US jobs data reinforced expectations of tighter Federal Reserve monetary policy. Nonfarm payrolls surged by 172,000 in May, nearly double the forecasted 85,000, leading markets to fully price in a Fed rate hike by year-end. Investors also prepared for a likely European Central Bank rate hike next week, while monitoring potential progress in Middle East resolution efforts. Markets now anticipate a near-certain 25-basis-point ECB rate increase at the June 11 meeting, with two or possibly three hikes expected this year. This comes as euro-area inflation rose to 3.2% in May, its highest in over two and a half years. Uncertainty remains, however, after Eurozone GDP figures were revised to show a contraction in Q1 2026—the first since late 2022 and the steepest since mid-2020.
2026-06-05
Bund Yields Near 3% as ECB Rate Hike Looms
German 10-year Bund yields hovered just above 3% as investors anticipated a likely European Central Bank rate hike next week, while cautiously hoping for progress in Middle East peace efforts. Markets now expect a near-certain 25-basis-point ECB rate increase at the June 11 meeting, with two or possibly three hikes projected for this year. This comes after euro-area inflation reached 3.2% in May, its highest in over two and a half years,with core and services inflation rising, indicating broader price pressures beyond energy. Yet, uncertainty persists as policymakers weigh high inflation against weak economic growth. One of the ECB’s most hawkish members, Isabel Schnabel, warned on Monday that it is too early to determine the exact number of rate hikes. Meanwhile, US-Iran talks continued, and military clashes between Lebanon and Israel persisted despite a pending US-brokered ceasefire.
2026-06-05