German 10-year bund yields declined on the 21st as falling energy prices eased expectations for further European Central Bank (ECB) rate increases. At 4:00 p.m. UK time, the yield was in the mid-3.4% range, about 0.07 percentage point below the same time the previous weekend. Bond futures rose 78 points to 121.10, putting bunds on track for their strongest price rally since May. November Brent crude briefly dropped below $100 a barrel, or about ¥16,000, its lowest level since the 9th. Reports of increased shipping through the Strait of Hormuz and growing optimism that diplomacy could end the U.S.-Iran war drove selling in oil and natural gas. Markets pared ECB hike expectations by as much as 10 basis points, pricing a 12.5 bp increase at the October meeting, 35 bp cumulatively by the end of 2026 and 81 bp by the end of 2027. Italian and French 10-year yields each fell 11 bp, while French bonds outperformed and narrowed the German-French spread to 101 bp. The Italian government appointed banks for a new 12-year green bond. UK 10-year gilt yields fell about 0.10 percentage point to the low-5.2% range, while markets priced a 20 bp Bank of England increase in November and 37 bp cumulatively by year-end. Investors are watching U.S.-Iran diplomatic negotiations and oil prices, with further energy declines potentially allowing European yields to fall, while an oil rebound could revive rate-hike expectations.