European Leading Indicators | Oil prices, bond yields and financial stress

Here we look at the European leading indicators in the world of economics.

For in-depth analysis into commodities, trade, equities and more with a focus on Europe

Key Insights:

• Oil prices continued to climb amid the ongoing Middle East conflict, with Brent Crude rising to $100.76 per barrel. Should energy prices remain at current levels, Capital Economics estimates Eurozone headline inflation to rise to around 3%. While the ECB is expected to hold rates this week, markets are pricing in a hike by end‑July, diverging from economists’ forecasts for stable policy rates in 2026.
  
  
• Global bond yields remain under upward pressure as the conflict has intensified energy‑driven inflation risks, reinforcing expectations of tighter monetary policy ahead of a busy week of global central bank meetings. Germany’s 10‑year Bund yield held above 2.9%, close to its highest level since October 2023. Across markets, yields remain volatile, as investors react to shifting geopolitical signals and inflation expectations.
  
  
• Market volatility has increased. The new CISS for the Eurozone - an indicator of financial stress - remains at 0.0471, sitting slightly below its long‑term average and past periods of elevated stress. Meanwhile, the VIX - the market’s so called “fear gauge” – stands at 23.5, above its long-term average of 18.3, but down from 29.5 in early March.