Euro zone bond yields rise as oil prices climb; central banks in focus
TLT•Brent crude rises on supply concerns
Brent crude futures LCOc1 were last up 2.9% to $107.57 a barrel as supply concerns grew following attacks around the Middle East's two most important oil transit routes. Diplomatic efforts to resolve the conflict in the region meanwhile seemed to falter as a meeting between Iran and other Gulf powers was postponed.
Central bank meetings in focus this week
After the European Central Bank hiked interest rates by 25 basis points last week, and left the door open to further tightening, central bank action will be key for markets again this week as the Federal Reserve, Bank of Japan and Bank of England are among those to announce interest rate decisions.
Markets are expecting rate hikes from the Fed and BOJ, while the BoE is set to leave policy unchanged. Beyond the interest rate decisions, traders are also keen to gather clues about what might lie ahead for interest rates and the economy - especially as energy prices have been climbing again.
German short-dated yields also move higher
The yield on the German 2-year government bond DE2YT=RR, which is more sensitive to interest rate expectations, was last up 4.1 bps to 3.2151%, around its highest since late 2023.
Money markets were last pricing in at least one more interest rate hike from the ECB this year.
Euro zone bond yields rise as oil and rate worries grow
Euro zone bond yields rose on Monday, sending Germany's 10-year bond yield to its highest since June 2009, as oil prices climbed and investors were on edge about how hawkish several major central banks may sound at their meetings this week.
Global bond markets have come under pressure from higher energy prices and growing worries about rising inflation and higher interest rates, with yields repeatedly climbing to fresh multi-year highs.
