German bond yields post biggest drop since October on falling oil prices.

The yield curve of German government bonds continued to decline, as falling oil prices helped alleviate concerns about inflation exacerbated by the recent rise in energy prices due to tensions with Iran. The yield on German 10-year government bonds fell by 5 basis points to 2.93%; while the yields on Italian and French government bonds of the same maturity fell by 9 basis points to 3.70% and 8 basis points to 3.59% respectively. The drop in the 10-year German government bond yield was the largest since October 10th. The interest rate swap market indicates that the European Central Bank is expected to raise rates by 40 basis points this year, down 9 basis points from the previous day. This trend is driven by WTI crude oil falling 4% to $95 per barrel, and Brent crude falling 1% to $102 per barrel.