FX.co ★ Germany’s Bund Yield Hovers Above 3% on Inflation Concerns

Germany’s 10-year Bund yield edged lower but remained above 3%, nearing its highest level since 2011, as surging crude oil prices and mounting inflation worries strengthened expectations of further European Central Bank rate hikes. Investors drew brief reassurance from reports that Iranian Foreign Minister Abbas Araghchi would visit Islamabad on Friday, rekindling hopes for progress in US–Iran negotiations. Still, Brent crude is on course to end the week 14% higher, underscoring the limited progress in peace talks. Market sentiment remains cautious: money markets are fully pricing in two 25-basis-point ECB rate increases for 2026 and see a strong likelihood of a third hike by year-end. On the economic front, Germany’s Ifo Business Climate Index fell to 84.4 in April—its lowest reading since May 2020 and below the consensus forecast of 85.5—amid growing concern that the Middle East conflict is further undermining Germany’s already fragile economic recovery.