Eurozone Bond Yields Rise as Oil Prices Rebound Above $100

Global bond yields in the Eurozone rose on Tuesday, partly reversing Monday's sharp decline. The increase was driven by a rebound in oil prices above $100 a barrel and renewed Middle East tensions that heightened concerns over inflation.

Oil prices moved higher as tensions in Yemen remained elevated. Brent crude futures were last up nearly 2% at around $102 a barrel, which helped European bond markets recover after a recent selloff. The Eurozone economies are particularly sensitive to energy costs due to their reliance on imported fuel.

Germany's benchmark 10-year bond yield rose by 3 basis points to 3.481%, while Italian and French 10-year yields climbed 4 basis points each to 4.376% and 4.509% respectively. The rise in bond yields has been driven by expectations that the Middle East energy shock could keep inflation elevated, as well as resilient economic growth encouraging traders to bet on higher interest rates.