FX.co ★ German 10-Year Bund Yield Hits February High on Inflation Fears

Germany’s 10-year Bund yield rose to 2.77%, its highest level since February 12, as mounting tensions in the Middle East stoked inflation fears and led investors to dial back expectations for imminent interest rate cuts by major central banks. A sharp increase in natural gas and crude oil prices—driven by the formal closure of the Strait of Hormuz and the ongoing halt in Qatari LNG exports—has intensified concerns over global energy supplies. This renewed upward pressure on energy costs is expected to amplify inflationary risks across Europe, potentially pushing the European Central Bank toward a more hawkish policy stance. Investors are also awaiting the release of key inflation figures from Italy and the broader Eurozone later today, which may offer additional clues about the future trajectory of monetary policy.