Germany’s 10-year Bund yield inched up to 3.47% on Tuesday, partially reversing a seven-basis-point drop in the previous session, as oil prices rebounded from recent lows and looked set to break a four-day losing streak. Brent crude moved higher after briefly touching its lowest level since September 10, with ongoing tensions in the Middle East keeping markets focused on energy supply risks and potential diplomatic developments at this week’s UN meetings.
Eurozone bond yields have risen to multi-year highs amid fears of an energy-driven inflation shock, reinforcing expectations that interest rates will need to stay higher for longer. At the same time, investors are assessing the impact of elevated public debt levels and rising corporate borrowing, particularly to finance investment in artificial intelligence.
Mounting political uncertainty is adding to the pressure on markets. In Germany, the governing CDU recorded its worst-ever result in Mecklenburg-Western Pomerania, failing to secure a single seat. The setback has triggered internal party unrest, with some members urging Chancellor Friedrich Merz to resign after just 16 months in office.
