Germany 10Y Bond Yield Hits 15-year High

Germany 10 Year Government Bond Yield increased to 3.40%, the highest since April 2011. Over the past 4 weeks, Germany 10Y Bond Yield gained 21.77 basis points, and in the last 12 months, it increased 73.00 basis points.

Germany’s 10-year Bund yield rose to 3.4%, touching its highest level since April 2011, as surging energy prices heightened inflation concerns ahead of this week’s European Central Bank meeting. Brent crude neared $100 a barrel, while European natural gas prices climbed to their highest level since late 2022 amid renewed tensions in the Middle East and reports that Iran and Oman were nearing an agreement to manage shipping through the Strait of Hormuz. Higher energy prices have intensified a global bond selloff, while persistent inflation pressures and resilient economic growth are keeping central banks under pressure to maintain a restrictive policy stance. The ECB is widely expected to raise interest rates on Thursday, with markets almost fully pricing in another hike by year-end. In the US, investors are awaiting key inflation data later this week, after Friday’s strong jobs report lifted the probability of a Fed hike next week to nearly 60%.

Germany’s 10-year Bund yield edged up to 3.38% on Monday, moving closer to a more than 15-year high of 3.3951% touched last week, as investors remained cautious following the far-right AfD’s strong victory in Saxony-Anhalt and ahead of this week’s ECB meeting. The AfD won 44% of the vote, falling short of an overall majority but dealing a major blow to Chancellor Friedrich Merz’s conservatives. Meanwhile, Brent crude moved closer to seven-week highs after the US struck three Iranian oil tankers over the weekend, destroying one, while Tehran threatened a new restricted zone outside the Strait of Hormuz. Higher energy prices have fueled a global bond selloff, with German borrowing costs rising for a fourth straight week as inflation pressures and resilient growth keep central banks under pressure to tighten policy. The ECB is expected to raise rates on Thursday, with markets pricing around a 90% chance of another hike by year-end.