Germany’s 10-year Bund yields remained steady just above 3.05%, close to three-week highs, following the European Central Bank’s expected 25-basis-point rate increase, its first since 2023. The move came as policymakers highlighted rising energy costs and persistent inflation risks, compounded by the Iran conflict and disruptions to oil shipments through the Strait of Hormuz. The ECB also upwardly revised its inflation forecasts, now expecting headline inflation to reach 3.0% in 2026 (up from 2.6%) and 2.3% in 2027 (up from 2.0%), with core inflation projected at 2.5% for both years (up from 2.3% and 2.2%). Meanwhile, the growth outlook was slightly lowered, with Eurozone GDP now forecast at 0.8% in 2026 (down from 0.9%) and 1.2% in 2027 (down from 1.3%). Elsewhere, Middle East tensions escalated, as repeated military strikes and diplomatic setbacks reduced prospects for a US-Iran resolution.