The yield on Germany’s 10‑year Bund rose to 2.79%, its highest level since February 10, as investors reacted to stronger‑than‑expected Eurozone inflation data and escalating tensions in the Middle East. February figures showed headline Eurozone inflation at 1.9% year-on-year and core inflation at 2.4%, both exceeding market forecasts.
Energy markets added to the upward pressure, with natural gas and crude oil prices surging after the formal closure of the Strait of Hormuz and the continued suspension of Qatari LNG exports. The resulting increase in energy costs is expected to keep inflationary pressures elevated across Europe, potentially prompting the European Central Bank to maintain a hawkish policy stance for longer.
At the same time, US President Donald Trump stated that the military campaign against Iran could last four to five weeks, while emphasizing that US forces are prepared to extend operations if necessary.
