Eurozone Bond Yields Ease as Energy Prices Cool

2026-09-03 09:25 By Joana Ferreira 1 min. read

Eurozone government bonds snapped a six-day losing streak on Thursday, pushing yields down from multi-year highs as easing energy prices helped alleviate inflation concerns and led markets to marginally scale back expectations for European Central Bank rate hikes.

Germany’s 10-year Bund yield eased to 3.36%, just below Wednesday’s 15-year high of 3.3951%, as Brent crude retreated from six-week highs and natural gas prices fell from their highest level since January 2023.

The declines came after US President Donald Trump said the renewed US military campaign in Iran would not last long.

Bond yields nevertheless remain elevated amid concerns over energy-driven inflation, higher interest rates and fiscal sustainability in countries including France and the UK.

Money markets continue to fully price in a 25-basis-point ECB rate hike to 2.5% next week.

Markets are also pricing in an almost 100% probability of a 3% deposit rate by June 2027, implying two further rate increases by mid-2027.



News Stream
Eurozone Bond Yields Ease as Energy Prices Cool
Eurozone government bonds snapped a six-day losing streak on Thursday, pushing yields down from multi-year highs as easing energy prices helped alleviate inflation concerns and led markets to marginally scale back expectations for European Central Bank rate hikes. Germany’s 10-year Bund yield eased to 3.36%, just below Wednesday’s 15-year high of 3.3951%, as Brent crude retreated from six-week highs and natural gas prices fell from their highest level since January 2023. The declines came after US President Donald Trump said the renewed US military campaign in Iran would not last long. Bond yields nevertheless remain elevated amid concerns over energy-driven inflation, higher interest rates and fiscal sustainability in countries including France and the UK. Money markets continue to fully price in a 25-basis-point ECB rate hike to 2.5% next week. Markets are also pricing in an almost 100% probability of a 3% deposit rate by June 2027, implying two further rate increases by mid-2027.
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