German Bund Yields Slide to Three-Month Lows

Germany’s 10-year Bund yields fell toward 2.9%, their lowest since March 17, as traders scaled back expectations for further European Central Bank rate hikes amid a continued decline in oil prices, driven by growing expectations of a US-Iran deal this week. Crude has tumbled to fresh three-month lows, though it remains above pre-conflict levels of around $65 per barrel, with oil flows still far from normal. Money markets now price in less than 30 basis points of ECB tightening this year, equivalent to just one rate hike. ECB policymaker Gediminas Šimkus stated on Wednesday that upside risks to inflation still justify further tightening, and he expects at least one more hike to anchor inflation expectations.

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.