Bund yields hit highest since October 2023 as oil prices jump

Euro area ​benchmark Bund ​yields hit their highest level ​in almost 2-1/2 years on Thursday, as Middle East conflict ‌fuelled ⁠inflation fears ⁠and expectations for interest ​rate hikes.

Oil prices jumped back briefly above $100 a barrel as Iran stepped up attacks on oil and ⁠transport facilities ‌across the Middle East.

Germany's ​10-year government bond ⁠yield rose 3 basis points (bps) to 2.96%, ​its highest since ​October 2023.


Money markets were fully pricing a European Central Bank rate hike by July, with ‌an 85% chance of second increase by December

In late ​February, ⁠before the outbreak of the war, traders had attached a roughly ​40% chance of a rate cut from the ECB before year-end.