Euro zone bond yields rise as oil climbs, inflation data in focus
TLT•Euro zone bond yields rose as oil prices climbed, with Germany’s 10-year yield at 3.6416%, near its highest level since June 2009. September euro zone inflation is expected to rise to 3.6% from 3.2% in August.
1. Yields climb
Germany’s 10-year bond yield, the euro zone benchmark, rose 1.8 basis points to 3.6416%, around its highest level since June 2009. It is on track for a monthly increase of more than 31 basis points after a seventh consecutive weekly gain.
2. Oil and rate outlook
Brent crude futures rose about 4% to $108.50 a barrel as doubts persisted over a resolution to the US-Iran conflict and the reopening of the Strait of Hormuz. The European Central Bank has raised rates twice this year, and money markets are pricing in at least one more increase by year-end and roughly 100 basis points of tightening by October 2027.
3. Inflation in focus
Flash inflation data due later this week are expected to show euro area inflation accelerating to 3.6% in September from 3.2% in August. Germany’s two-year yield rose 3.3 basis points to 3.3196%, while Italy’s two-year yield was about 5 basis points higher at 3.6132%.
