Bund Yields Climb Ahead of ECB Decision

2026-07-20 06:34 By Joana Ferreira 1 min. read

Germany's 10-year Bund yield rose to 3.15%, approaching a near two-month high, as surging oil prices reinforced expectations that the European Central Bank will deliver two more rate hikes by early 2027.

The two-year Bund yield, which is more sensitive to interest rate expectations, climbed above 2.8% to its highest level since July 2024.

Brent crude rose above $90 a barrel, its highest level in over a month, as escalating US-Iran hostilities threatened oil flows through the Strait of Hormuz, fueling inflation concerns.

Money markets now price the ECB's deposit rate at 2.70% by December and 2.78% by February 2027, up from the current 2.25%, with the first hike expected as soon as September.

Attention now turns to Thursday's ECB policy meeting, where policymakers are widely expected to leave rates unchanged and adopt a wait-and-see stance following June's first rate hike in three years.



News Stream
Bund Yields Hold Near Two-Month High Ahead of ECB
Germany's 10-year Bund yield rose to 3.15%, close to a two-month high, while the more policy-sensitive two-year Bund yield climbed above 2.8%, its highest level since July 2024. Brent crude touched its highest level in more than a month as escalating US-Iran hostilities threatened oil flows through the Strait of Hormuz, fueling inflation concerns and reinforcing expectations that the European Central Bank will deliver two more rate hikes by early 2027, with the first increase expected as soon as September. Attention now turns to Thursday's ECB policy meeting, where policymakers are widely expected to leave rates unchanged and adopt a wait-and-see stance following June's first rate hike in three years.
2026-07-20
Bund Yields Climb Ahead of ECB Decision
Germany's 10-year Bund yield rose to 3.15%, approaching a near two-month high, as surging oil prices reinforced expectations that the European Central Bank will deliver two more rate hikes by early 2027. The two-year Bund yield, which is more sensitive to interest rate expectations, climbed above 2.8% to its highest level since July 2024. Brent crude rose above $90 a barrel, its highest level in over a month, as escalating US-Iran hostilities threatened oil flows through the Strait of Hormuz, fueling inflation concerns. Money markets now price the ECB's deposit rate at 2.70% by December and 2.78% by February 2027, up from the current 2.25%, with the first hike expected as soon as September. Attention now turns to Thursday's ECB policy meeting, where policymakers are widely expected to leave rates unchanged and adopt a wait-and-see stance following June's first rate hike in three years.
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German Bund Yield Rises on Oil Surge, ECB Rate Hike Bets
Germany’s 10-year Bund yield climbed above 3.1%, its highest since May 20, as rising oil prices, driven by escalating Middle East tensions, fueled inflation concerns and reinforced expectations of further European Central Bank tightening. Brent crude reached a one-month high as the US blockade of Iranian shipping in the Strait of Hormuz and continued strikes against Iran raised doubts about global energy supply stability. The ECB, which delivered its first interest rate hike in three years in June, is widely expected to tighten policy further. Markets are now fully pricing in a rate increase in September and anticipate another hike by next spring. However, recent comments from policymakers like Piero Cipollone and Martin Kocher suggest a cautious stance, making a July move unlikely.
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