ECB Rate Hike Looms as Bund Yield Hits 15-Year High

The European Central Bank's upcoming policy meeting has investors bracing for a potential interest rate hike. Germany's 10-year Bund yield has reached its highest level since April 2011, holding just below 3.4%. This comes as the market anticipates two ECB rate hikes in 2026, with the deposit rate expected to reach 3% by late 2027.

The ongoing war involving Iran and escalating tensions in the Middle East have added uncertainty to the inflation outlook. As a result, European natural gas prices have climbed to fresh three-and-a-half-year highs, while Brent crude briefly reached $100 a barrel for the first time since July 24.