Bund Yields Hold at 17-Year High as Lagarde Signals Caution, Oil Rises

2026-09-28 13:49 By Joana Ferreira 1 min. read

Germany’s 10-year Bund yield trimmed an early rise to stabilize at 3.62%, its highest level since June 2009, as investors weighed comments from ECB President Christine Lagarde against a renewed rally in oil prices.

Lagarde said the inflation outlook for 2027 and 2028 is now higher than policymakers expected a few months ago, mainly due to higher energy prices, but noted there is no evidence yet of energy costs feeding into higher wages.

She added that while the shock is too significant to ignore, a measured policy response remains appropriate to keep inflation under control.

Meanwhile, oil prices climbed after President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz and end the conflict in the Middle East.

Money markets are pricing in roughly 100 basis points of ECB rate hikes by the end of 2027, while investors now await key eurozone inflation data due later this week for further clues on the ECB’s monetary policy outlook.



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