Euro zone bond yields drop after US and Iran pause strikes
TLT•Euro zone yields fall as oil prices ease
Euro zone government bond yields fell on Monday as easing oil prices helped calm short-term inflation fears after U.S. President Donald Trump's decision to suspend attacks on Iran and leave room for diplomacy.
Oil prices tumbled more than 5% after the U.S. and Iran halted strikes, raising hopes of a diplomatic solution that would allow shipping to resume in the Strait of Hormuz.
Benchmark Bund and Italian yields also decline
Germany’s 10-year government bond yield <DE10YT=RR>, the euro area’s benchmark, was down 3 bps at 3.14%. It reached 3.2118% last week for its highest since May 2011.
Italy’s 10-year government bond yields <IT10YT=RR> fell 5 bps to 3.95%.
The spread between Italian government bonds and Bunds <DE10IT10=RR> was at 79 bps. It was at 63 bps in February before the attack on Iran and hit 103.62 in late March, the highest since June 2025.
German yields and rate expectations move lower
Germany’s 2-year yields <DE2YT=RR>, more sensitive to expectations for policy rates, fell 2.5 basis points (bps) to 2.79%, having reached 2.8938% last week for the highest level since July 2024.
