German 10-year Bund yields remained above 3.2%, near their highest level since March 2011, while the euro held above $1.165, its strongest level since mid-May. Investors are preparing for a more hawkish European Central Bank and awaiting details of potential sanctions against Iran. The ECB is widely expected to raise interest rates in September after tightening in June to address inflation pressures linked to the US-Iran conflict and higher energy prices. Oil remains above $90 a barrel, with markets also weighing possible refined-fuel supply constraints, low gas inventories and the risk that the conflict could extend beyond the November US midterm elections. A September increase would lift the ECB deposit rate to 2.5%, while markets price a 25% chance of the rate reaching 3% by March 2027 and a 60% chance by September. US Treasury Secretary Scott Bessent is due to hold a press conference after threatening "the toughest sanctions in history" against Iran, with investors watching for possible measures targeting China. Iran’s foreign minister dismissed the sanctions as desperate.