March 12 (Reuters) - Euro area benchmark Bund yields hit their highest level in almost 2-1⁄2 years on Thursday, as Middle East conflict fuelled inflation fears and expectations for interest rate hikes.
Oil prices jumped back briefly above $100 a barrel as Iran stepped up attacks on oil and transport facilities across the Middle East.
Germany’s 10-year government bond yield (DE10YT=RR) rose 3 basis points (bps) to 2.96%, its highest since October 2023.
Money markets were fully pricing a European Central Bank rate hike by July, with an 85% chance of second increase by December (EURESTECBM7X8=ICAP)
In late February, before the outbreak of the war, traders had attached a roughly 40% chance of a rate cut from the ECB before year-end.

Reuters

ISHRS S&P Glb Engy

United States Oil Fund LP

Bund yields hit highest since October 2023 as oil prices jump