FX.co ★ Bund Yields Near Two-Year High as Inflation Fears Rise

Germany’s 10-year Bund yield rose to 2.93%, moving back toward last week’s more than two-year peak of 2.99%, as renewed Middle East violence stoked inflation worries ahead of pivotal central bank meetings. Oil extended its rally after Israel struck Iran’s Asaluyeh refinery and the South Pars gas field, while Iran’s Revolutionary Guard urged evacuations at oil facilities in Saudi Arabia, the UAE, and Qatar. The surge in energy prices and intensifying inflationary pressures have led markets to price in a more restrictive policy stance from major central banks. Although the ECB, the Federal Reserve, and the Bank of England are all expected to keep interest rates unchanged this week, investors are focused on any guidance policymakers provide on managing the economic fallout from the escalating conflict.