FX.co ★ Bund Yields Near 15-Year High on ECB Rate Hike Bets

Germany’s 10-year Bund yield climbed to 3.1%, approaching its highest level since May 2011, as traders priced in further European Central Bank rate hikes amid ongoing concerns about the fragile US-Iran ceasefire and stubborn inflation. Brent crude oil rose above $105 a barrel after US President Trump rejected Iran’s latest peace proposal, dismissing it as a “piece of garbage” and conceding he “didn’t even finish reading it.” Heightened fears of a prolonged economic fallout from the Middle East conflict have led investors to anticipate three ECB rate increases by year-end, with markets assigning more than an 86% probability to the first hike in June. At the same time, final data showed Germany’s inflation rate rose to 2.9% in April, its highest level since January 2024, driven by surging energy costs.