The yield on Germany's 10-year government bonds remains stable above 3.15% as the market awaits interest rate guidance ahead of the European Central Bank meeting.

⑴ The yield on Germany's 10-year government bonds held steady above 3.15% on Wednesday, near the multi-year high of 3.2% reached in May. Investors remained on the sidelines ahead of Thursday's European Central Bank policy decision, while also monitoring the escalation of tensions in the Middle East. The market widely expects the ECB to keep rates unchanged after a rate hike in June, as policymakers maintain a cautious stance amid mixed economic data and heightened geopolitical uncertainty. ⑵ Nevertheless, the market is still pricing in about two additional rate hikes this year, with the next one possibly occurring in September. Concerns that Middle East conflicts could disrupt global oil supplies are keeping inflation risks in focus. Brent crude rose to the highest level in over a month after US President Trump ruled out the possibility of near-term negotiations with Iran, warned of further military strikes, and pledged retaliation if Houthi forces in Yemen disrupt shipping in the Red Sea.