Euro zone bond yields tick higher as oil remains elevated; eyes on ECB

Euro zone government bond yields rose as elevated oil prices raised inflation concerns and supported expectations of tighter European Central Bank policy. Germany 10-year yield climbed 1.5 bps to 3.165%, the highest in eight weeks, with two-year yields near a two-year high. The ECB is expected to hold its deposit rate at 2.25% this week, but markets are pricing in around 45 bps of tightening by year-end. Brent crude hit a five-week high and Dutch wholesale gas prices surged, adding to inflation worries amid US-Iran tensions disrupting Strait of Hormuz traffic.