Germany 10Y Bond Yield Hits 9-week Low

Germany 10 Year Government Bond Yield decreased to 2.93%, the lowest since April 2026. Over the past 4 weeks, Germany 10Y Bond Yield lost 23.47 basis points, and in the last 12 months, it increased 39.22 basis points.

Germany’s 10-year Bund yields fell toward 2.95%, their lowest since May 29, after oil prices tumbled following the preliminary US-Iran agreement to end their three-month conflict. The deal, including lifting the US blockade and reopening the Strait of Hormuz, a vital route for 20% of global energy, sparked a sharp drop in oil prices, reducing pressure on central banks to raise interest rates to curb inflation. Money markets now expect about 30 basis points of further ECB tightening this year, equivalent to one rate hike, down from nearly two before last Thursday’s increase. ECB President Christine Lagarde welcomed the development but cautioned that past hopes had been dashed and noted emerging second-round effects from the conflict. ECB’s Joachim Nagel added that oil supply recovery would take months, delaying any immediate inflation relief.

Germany’s 10-year Bund yields fell below 3%, hitting their lowest level since June 3, as markets reacted to overnight remarks from US President Donald Trump suggesting a potential US-Iran deal could be signed as early as this weekend. Tehran, however, stated it had not yet made a final decision. Yields have fluctuated in tandem with oil prices and war-related headlines, as traders assess the risks of prolonged Strait of Hormuz closures. The longer the disruption persists, the greater the likelihood of sustained high energy prices feeding into broader inflation, potentially forcing central banks to implement significant rate hikes. Supporting this view, the European Central Bank raised interest rates on June 11 for the first time in three years, aiming to preempt a broader inflation surge from rising fuel costs. Money markets now anticipate another rate hike, most likely in September, though July remains a possibility.