Germany’s 10-year Bund yield has climbed above 3.5%, its highest level since June 2009, after rising more than 16 basis points last week—the largest weekly increase since early March, shortly after the Iran war began. Global bond markets remain under pressure amid elevated energy prices and mounting concerns over inflation and higher-for-longer interest rates, with sovereign yields repeatedly touching new multi‑year highs.
Oil prices have surged well beyond $100 a barrel as tensions in and around the Strait of Hormuz have intensified, following renewed Houthi strikes on Saudi Arabia and Iranian attacks on shipping in the Gulf.
The ECB raised interest rates last week and signaled that further tightening remains possible, leading markets to price in at least one additional rate hike this year. Investor focus now shifts to a pivotal week for central banks: the Federal Reserve announces its decision on Wednesday, followed by the Bank of England on Thursday and a widely anticipated rate hike by the Bank of Japan on Friday. The BoE is expected to keep rates on hold, but the vote is likely to be narrowly split.
