FX.co ★ Germany’s 10-Year Bund Yield Stays Near 15-Year High

Germany’s 10-year Bund yield hovered around 3.05%, near its highest level in 15 years, as persistent inflationary pressures outweighed optimism stemming from US-Iran peace talks. Mediators reported progress on extending the ceasefire, with both sides agreeing in principle to continue negotiations on Tehran’s nuclear program, the status of the Strait of Hormuz, and war reparations. However, uncertainty remains after the United States announced plans to deploy an additional 10,000 troops to the region. The renewed prospect of dialogue pushed oil prices back below $100 per barrel and improved risk sentiment, but elevated energy costs continue to fuel inflation. Markets are now pricing in at least two additional ECB rate hikes by the end of the year. On Tuesday, ECB President Christine Lagarde said that higher energy prices have pushed the eurozone away from its baseline economic outlook, but she gave no indication of imminent policy action.