Treasury and Bund yields rise as Middle East tensions lift oil
U.S., German and U.K. 10-year yields hit four-week highs as Brent neared $79.60 and Iranian threats to close the Strait of Hormuz intensified inflation and supply concerns.
Yields on 10-year U.S., German and U.K. government bonds rose to four-week highs as renewed U.S.-Iran tensions and threats to the Strait of Hormuz pushed oil and gas prices higher, reinforcing concern that stronger energy costs could feed inflation and affect interest-rate expectations. Brent crude rose as much as 5%-6% and traded around $78.63-$79.60 a barrel, while WTI gained about 4.75%-6.2%; Dutch TTF natural gas also climbed 4.8% to 49.04 euros a megawatt-hour in midmorning European trade. The move followed President Trump saying he believed his ceasefire deal with Iran was over and Iranian media reporting Tehran would close the Strait of Hormuz if it faced any new attack.
- Strait of Hormuz: A strategic shipping chokepoint through which a large share of Middle Eastern oil passes to global markets.
- German Bunds: German government bonds, often used as a benchmark for euro-area sovereign debt markets.
- Dutch TTF: A leading European natural-gas trading benchmark based in the Netherlands.