Euro zone yields rise after US data, traders focus on possible Strait of Hormuz deal
TLT•ECB rate expectations and longer-dated yields
Germany's 30-year yield was 1 bp higher at 3.728%, after falling 4 bps on Tuesday.
Sources told Reuters that ECB policymakers are ready to raise interest rates at their next meeting in September to contain the side-effects of the Iran war, but they have little appetite to signal further tightening after that point.
Money markets were last pointing to around 40 bps of further tightening from the ECB by the end of the year, down a touch from Tuesday. The probability of a rate hike next month was around 95%.
Oil prices fall as traders watch Strait of Hormuz talks
Oil prices fell for a third straight day, amid hopes that a deal could soon be reached on reopening the Strait of Hormuz. Brent crude was down 1% at $87.80 a barrel.
Iran and Oman are still working on the details of an agreement, a senior Iranian source told Reuters on Wednesday, after Iran's Revolutionary Guards said the two countries had reached a deal on sharing the waterway and its revenues.
