German bond yields rose as oil prices increased amid U.S.-Iran tensions. This surge strengthened expectations for the European Central Bank to tighten monetary policy. Money markets now anticipate higher deposit rates by early 2027. Traders have fully priced in a rate hike at the ECB's upcoming September meeting. Italy's 10-year bond yield also increased, widening the spread with German yields.

According to Reuters, policymakers are widely expected to keep the ECB's key interest rate unchanged at 2.25%, following June's surprise rate hike that made the central bank the…

Fresh fighting in the Middle East and renewed energy price rises have thrown a curveball at the European Central Bank as policymakers mull whether to hike interest rates again…