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03.08.202607:32:09UTC+00Bund Yield Eases as Falling Oil Prices Temper Rate Expectations

Germany’s 10-year Bund yield slipped to 3.15% at the start of August as lower oil prices eased inflation worries and dampened expectations of further interest rate hikes. Crude prices retreated after US President Donald Trump announced that fresh talks with Iran would begin on Monday, alleviating fears of a wider Middle East conflict following days of escalating rhetoric. This development led money markets to scale back expectations for additional tightening by the European Central Bank, although a rate increase by September remains largely priced in. Even so, stronger-than-anticipated eurozone data continued to underpin the case for tighter policy. The bloc’s economy expanded by 0.4% in the second quarter, surpassing forecasts of 0.2% and marking its fastest pace of growth since early 2025. At the same time, annual inflation quickened to 2.9% in July, with both core and services inflation also strengthening.

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