24.08.202607:14:59UTC+00Bund Yield Near 2011 Highs on ECB Hawkishness

German 10-year Bund yields remained above 3.2%, hovering near their highest level since March 2011, as investors positioned for a more hawkish European Central Bank and awaited details on new sanctions against Iran. The ECB is widely expected to raise interest rates in September, following its June tightening aimed at countering inflationary pressures stemming from the US–Iran conflict and its impact on energy markets.

Oil prices are holding above $90 per barrel, amid heightened risks of further supply constraints in refined fuels, low gas inventories, and a conflict that could persist beyond the US midterm elections in November. A September hike would lift the ECB’s deposit rate to 2.5%, but expectations for additional tightening are building. Markets now assign a 25% probability that the deposit rate will reach 3% by March 2027 and a 60% probability by September.

At the same time, US Treasury Secretary Bessent is set to hold a press conference after threatening “the toughest sanctions in history” on Iran, with investors closely watching for any measures that might also target China.