Euro Zone Bond Yields Rise Amid Oil Price Surge

The euro zone government bond yields rose on Monday as oil prices climbed due to doubts about resolving the US-Iran conflict. Germany's 10-year bond yield, the euro zone benchmark, was up 2 basis points at 3.64%, its highest level since June 2009.

Rising energy prices and expectations of higher interest rates have put pressure on government bonds globally. The European Central Bank has raised rates twice this year, with money markets pricing in at least one further hike by year-end.

Looking ahead to October 2027, they are pricing in roughly 100 basis points of further tightening. Euro area inflation is expected to have accelerated to 3.6% in September from 3.2% in August, according to a Reuters poll.