Eurozone and German bond yields rose to their highest level since 2009

Euro zone bond yields rose on Monday, while the German 10-year bond yield rose to its highest level since June 2009, amid rising oil prices and increasing investor caution about the hawkishness of a number of major central banks during their meetings this week.

Global bond markets were under pressure due to rising energy prices and growing fears of rising inflation and rising interest rates, while yields continued to record new high levels, the highest in several years, according to Reuters.

The 10-year German bond yield, the euro zone's benchmark, rose by more than 16 basis points last week, recording its largest weekly increase since the first week of March, immediately after the outbreak of the Iran war.

On Monday, the yield recorded its highest level in more than 17 years, before rising in the latest trading by 2.5 basis points to 3.5271 percent.

After the European Central Bank raised interest rates by 25 basis points last week, and kept the door open to further monetary tightening, central bank movements will again be at the forefront of market attention this week, with interest rate decisions awaited by the US Federal Reserve, the Bank of Japan, and the Bank of England, among other institutions.

Markets expect interest rates to be raised by the Federal Reserve and the Bank of Japan, while the Bank of England is likely to keep its monetary policy unchanged. Aside from interest rate decisions, traders are also awaiting indicators regarding the potential path of interest rates and the economy in the next stage, especially with the return of energy prices to their rise.

Brent crude futures rose in the latest trading by 2.9 percent to $107.57 per barrel, with growing concerns about supplies following attacks that occurred near the two most important oil transport corridors in the Middle East.

The yield on two-year German government bonds, the most sensitive to interest rate expectations, rose 4.1 basis points to 3.2151 percent, reaching a level close to its highest levels since late 2023.

In their most recent transactions, financial markets were pricing in the possibility that the European Central Bank would raise interest rates again, at least, during the current year.