Bund Yield Eases Amid Oil Price Drop, ECB Rate Hike Expectations Persist

The yield on Germany's 10-year Bund has fallen toward 3.1% due to declining oil prices, which offset rising expectations for an interest rate hike by the European Central Bank in September.

Oil prices dropped as optimism grew that a deal between the US and Iran could end the conflict and reopen the Strait of Hormuz, a key shipping route.

Qatar said mediators were making progress in negotiations, while US Treasury Secretary Scott Bessent predicted an agreement could be reached as early as Tuesday or Wednesday.

The eurozone economy expanded 0.4% in the second quarter, exceeding expectations and supporting the case for a rate hike by the ECB.