Eurozone yields climb as oil spike triggers hawkish ECB expectations

Eurozone bond yields rose across the curve as traders reacted to a renewed oil-price spike and the risk that higher energy costs will keep inflation elevated in the euro area. Brent crude gained on ongoing geopolitical tensions involving the U.S. and Iran, pushing markets to price a more hawkish European Central Bank stance. Germany’s 10-year Bund yield moved to around 3.14%, near late-May highs, while the 2-year yield rose to about 2.79%, showing particular sensitivity to expectations for near-term policy tightening. Although the ECB is expected to keep rates unchanged at Thursday’s meeting after June’s 25-basis-point hike, investors now see a firmer, more data-dependent message and a September rate increase as a live possibility. The article signals a bearish backdrop for eurozone bonds and a supportive environment for energy prices, with broader inflation and rate expectations likely driving near-term market volatility.