Germany’s 10-year Bund yield (German government bond yield) ended the week at 3.57% after briefly exceeding 3.6%, its highest level since June 2009. The move came as oil prices pulled back from a two-day rally amid reports that the United States and Iran were considering a phased agreement that could reopen the Strait of Hormuz and ease the U.S. blockade on Iranian ports. Despite the oil retreat, the conflict and recent energy-price moves continue to raise concerns about renewed inflation. Money markets are pricing roughly 100 basis points of interest-rate hikes by the end of October 2027. In the United States, investors also increased expectations for further Federal Reserve tightening after hawkish policymaker comments and data showing resilient growth and a solid labor market. German consumer sentiment deteriorated more sharply than expected heading into October, with higher energy prices weighing on households’ income expectations.