Germany’s 10-year Bund yield climbed back above 3% after the extended Easter break, trading close to the multi-year highs reached at the end of last month. The move comes as markets await US President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz and accept a ceasefire, or face the threat of being "taken out."
Investors have largely shifted to a wait-and-see stance ahead of the deadline. Trump’s warnings of large-scale strikes on Iranian infrastructure have pushed energy prices higher, prompting markets to reassess the interest-rate outlook. Futures now imply three rate hikes by the European Central Bank this year.
Supporting this repricing, recent data show that euro area inflation rose to 2.5% in March, its highest level in more than a year.
