09.06.202608:13:29UTC+00Bund Yields Steady at Over Two-Week High

German 10-year Bund yields were trading just above 3.05%, their highest level since May 21, as easing tensions between Israel and Iran temporarily allayed fears that weekend attacks might derail US-led peace efforts in the Middle East. Investors are also turning their attention to Thursday’s European Central Bank policy meeting, where officials are widely expected to deliver a 25-basis-point rate increase — the first move in a year — after the Israel-Iran conflict sparked an energy shock and intensified inflationary pressures. Markets will scrutinize President Lagarde’s press conference for guidance on the likely path of future policy. The anticipated hike comes as euro-area inflation has risen to its highest level in more than two and a half years. Money markets are currently pricing in about 70 basis points of additional tightening by year-end, implying one more quarter-point increase and better than a 70% chance of a third.