Germany’s 10-year Bund yield fell for a second straight session, closing at 2.92%, slightly below Friday’s near two‑year high of 2.99%. Investors stepped back ahead of a pivotal week for central bank decisions, even as rising oil prices intensified inflation worries. The escalation of the US‑Israeli conflict with Iran has pushed energy prices higher, leading markets to anticipate a tighter monetary stance from the European Central Bank by year‑end.
Money markets now fully price in an ECB rate hike by July, with an 85% probability of a second increase by December. This week, the ECB, Federal Reserve, and Bank of England are all widely expected to leave interest rates unchanged, while investors look for signals on how policymakers intend to address the economic repercussions of the conflict. At the same time, German investor sentiment slumped sharply in March, reflecting concerns that surging prices could derail the country’s fragile recovery.
