German 10-year Bund yields rose to 3.25%, remaining close to the 15-year high of 3.275% touched last week, as investors continued to assess inflation risks stemming from the US-Israeli war with Iran and elevated levels of government spending. Meanwhile, oil prices remained subdued after US threats of an “economic D-Day” of sanctions on Iran had little impact. Brent nevertheless remained above $90 a barrel, with markets facing risks of further supply constraints for refined fuels, low gas inventories and a prolonged conflict that could extend beyond November's US midterm elections, prompting traders to increase their bets on ECB rate hikes. Money markets now price more than 40 basis points of additional ECB tightening this year, with the first move fully priced in as soon as next month. Resilient economic growth has also pushed up bond yields and rate-hike expectations. Data on Tuesday showed the German economy grew 0.3% in Q2 2026, above the preliminary estimate of 0.2%.