Euro Yields Spike as Oil Approaches $100 and ECB Hike Looms

European Central Bank (ECB) interest rates are expected to rise soon as euro zone sovereign bond yields surge higher, driven by rising crude oil prices and strong inflation data.

The benchmark German borrowing cost, Germany's policy-sensitive 10-year bond yield, has inched up to 2.984%, nearing its highest levels since 2024, while the 30-year bond yield held firm at 3.382%, near its 15-year high.

The upward pressure on yields comes as markets digest the compounding effects of a severe energy shock and persistent central bank hawkishness ahead of Thursday's ECB Governing Council meeting.