Bund Yields at 17-Year High as Rate-Hike Bets Rise

2026-09-28 07:56 By Joana Ferreira 1 min. read

Germany’s 10-year Bund yield climbed above 3.6%, touching its highest level since June 2009, as elevated energy prices fuel concerns over renewed inflationary pressure and hawkish central-bank signals push up rate expectations.

Brent crude rose above $106 a barrel amid fading optimism over progress in US-Iran talks.

Iran said it would not soften its conditions for reopening the Strait of Hormuz after President Trump rejected its proposal.

Speaking to Axios, Trump said Iran had “overplayed its hand” and that he expected negotiations to resume this week.

Money markets are now pricing in roughly 100 basis points of ECB rate hikes by late 2027.

Investors in the US and UK have similarly increased bets on further monetary tightening following hawkish comments from policymakers and data pointing to resilient growth.

Meanwhile, concerns over debt affordability in heavily indebted economies, particularly France and Italy, have added to pressure on European bonds ahead of elections next year.



News Stream
Bund Yields Climb to Two-Week High
Germany’s 10-year Bund yield rose towards 3.4%, reaching its highest level since late October, as investors increased bets on further European Central Bank interest rate hikes, while a rebound in equity markets this week reduced demand for safe-haven assets. ECB euro short-term rate (€STR) forwards now indicate that markets expect the deposit rate to rise from its current 2.5% to 3.25% by late 2027, up from 3% priced in last week. They also point to a rate of 2.74% by December 2026. Meanwhile, stronger-than-expected US inflation data released on Tuesday pushed Treasury yields higher and reinforced expectations of further Federal Reserve tightening. Markets are now fully pricing in a rate hike by December, with the possibility of a larger 50-basis-point increase also being considered. Adding to inflationary concerns, oil prices rebounded from more than two-month lows after US President Donald Trump said on Thursday that Washington did not need a deal with Iran.
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French Bond Yields Edge Up
France’s 10-year OAT yield edged up toward 4.81%, following a sharp rise in inflation concerns and interest rate expectations across the US and Europe earlier in the week. Stronger-than-expected US inflation data pushed Treasury yields higher and strengthened bets on further Fed rate hikes, with the sell-off spreading to European bond markets before stabilizing. Meanwhile, Brent crude traded around $93 a barrel, well below recent highs, while European gas prices also declined amid increased Gulf supplies and easing concerns over a renewed escalation in the conflict. On the monetary policy front, markets are pricing in an 80% chance of a 25-basis-point ECB rate hike in December, with two increases fully priced in by mid-2027. In the US, persistent inflation pressures and hawkish Fed commentary have reinforced expectations of a December rate hike, while raising the possibility of a larger 50-basis-point increase.
2026-11-12
German Bund Yields Halt Rally
Germany’s 10-year Bund yield steadied near 3.33%, as investors took a breather following a sharp rise in inflation concerns and interest rate expectations across the US and Europe earlier in the week. Stronger-than-expected US inflation data on Tuesday pushed Treasury yields higher and reinforced bets on further Federal Reserve rate hikes, with the sell-off spilling over into European bond markets before yields stabilized. Meanwhile, Brent crude traded around $93 a barrel, well below recent highs, while European gas prices also declined amid increased Gulf supplies and easing concerns over a renewed escalation in the conflict. On the monetary policy front, markets are pricing in an 80% chance of a 25-basis-point ECB rate hike in December, with two increases fully priced in by mid-2027. In the US, the latest inflation data and hawkish Fed commentary have reinforced expectations of a December rate hike, while raising the possibility of a larger 50-basis-point increase.
2026-11-12