Germany’s 10-year government bond yield rose to 3.275% on Friday, its highest level since 2011, as a renewed selloff in European sovereign debt reflected persistent inflation concerns, hawkish central-bank guidance and heavy government borrowing schedules. The two-year Schatz yield eased to 2.844% after reaching its highest level since late July earlier in the week. Energy-market volatility linked to Middle East tensions and Strait of Hormuz navigation concerns initially pushed yields higher, while reports of possible U.S.-Iran ceasefire and transit talks mediated by Oman and Qatar briefly drove crude oil and wholesale natural gas futures lower, helping the 10-year Bund yield fall below 3.20%. The ECB (European Central Bank) later renewed pressure on bonds when Executive Board member Isabel Schnabel said rates needed to rise further because current borrowing costs were insufficient to return euro-area inflation to the 2% target over the medium term. Money markets subsequently priced in an almost full probability of a 25-basis-point ECB rate increase in September. European debt markets also face structural supply pressure as governments increase bond sales to fund defense and energy-transition initiatives.