Oil Prices and Fed Decision End Euro Zone Bond Rally
The euro zone bond rally came to an end on Wednesday as rising oil prices and the upcoming Federal Reserve decision weighed on investors. The benchmark 10-year German Bond saw its price decline, lifting its yield by 1 basis point to 3.12%.
The yield had eased for three consecutive sessions after hitting a 15-year high of 3.212% on July 23. European bond markets have largely tracked developments in the Gulf conflict since hostilities began in late February, with movements in energy prices playing a key role in shaping investor sentiment.
Renewed attacks in the region and Iran's rejection of regional joint management of the Strait of Hormuz weighed on hopes for a resolution to the prolonged disruption in Gulf trade. Brent crude prices jumped 3.5% to $87 a barrel, contributing to the rise in European bond yields.