German yields hit 2-year high as Middle East conflict stokes inflation fears

German 2-year bond yields hit a two-year high of 2.798%, up 8 basis points, as US strikes on Iran and a reinstated blockade of Iranian shipping stoked inflation fears and pushed oil prices up nearly 3% to four-week highs. Money markets fully priced an ECB rate hike in September, with the deposit rate seen at 2.70% by December versus 2.25% currently. Separately, State Bank of India raised an additional $200 million through its London branch from an existing bond issue maturing in July 2029.