Germany’s 10-year Bund yield approached 2.98%, its highest since June 19, as crude oil prices climbed following attacks in the Strait of Hormuz.
The tensions pushed crude above $72 per barrel, its highest since early July, fueling inflation concerns.
Traders increased bets on ECB rate hikes, with official Isabel Schnabel warning that the Iran conflict’s economic impact persists, as core inflation remains strong.
Meanwhile, Germany’s cabinet approved a 2027 budget draft on Monday, planning €555.4 billion in spending and raising borrowing to €203.6 billion, up from April’s €196.5 billion estimate.
In France, a Paris court will rule on Tuesday on Marine Le Pen’s appeal against an election ban for misusing EU funds, a decision that could affect her 2027 presidential eligibility amid growing political uncertainty.