Italy’s 10-year BTP yield climbed above 3.3%, rebounding from Friday’s one-year low of 3.276%, as escalating Middle East tensions unsettled global markets and investors pared back expectations for interest rate cuts by major central banks amid renewed inflation worries. Over the weekend, US and Israel launched strikes on Iran, resulting in the reported death of Iran’s Supreme Leader and the effective closure of the Strait of Hormuz, with Iran responding via missile and drone attacks. A sharp surge in oil and gas prices has raised fears of renewed inflationary pressures across Europe, where gas inventories remain unusually low and substantial replenishment is needed ahead of next winter. Investors are also focused on key economic data this week, including flash Eurozone and Italy CPI figures for February.
