Euro zone yields around multi-week highs as inflation worries persist

LONDON, April 29 (Reuters) - Euro zone bond yields traded ​around multi-week ⁠highs on Wednesday as efforts to ​end the Iran war appeared to be in a stalemate and oil prices nudged higher again, prompting persistent inflation ​worries.

German ‌10-year bond yields, the benchmark for the euro zone, were last 1.6 basis points higher at ⁠3.0775%. They hit a two-week high of 3.0860% in the ⁠previous session.

The rate-sensitive German 2-year ​bond yield meanwhile climbed 4.3 bps higher to 2.6819%, its highest since April 7.

Bonds have come under renewed pressure in recent sessions, with yields steadily ticking higher, as efforts to end the war in ​the Middle ‌East seem to be at an impasse. U.S. President Donald Trump was unhappy with the latest proposal from Tehran, which he said had informed the U.S. it was in a "state of collapse" and figuring out its leadership situation.

Meanwhile, oil prices have been grinding higher ​as the crucial Strait of Hormuz remains effectively shut down. Brent crude futures for June rose for ‌the eighth day in a row on Wednesday and were last up over 1% at $113.25 a barrel.

Higher energy prices have fed ‌into inflation fears, which were underscored Tuesday by an ECB survey which showed inflation expectations for one year ahead had jumped to 4.0% in March from 2.5% a month earlier.

Preliminary inflation data ​for April due this week from across the euro zone will provide insights into the economic impact of the ‌war so far. In March, euro zone inflation jumped to 2.6%, and according to a Reuters poll of economists, the figure will likely have increased again in April.

The euro zone-wide data ⁠will be ⁠published not long before the European Central Bank's latest interest ‌rate decision on Thursday. Preliminary data out of Germany is meanwhile due Wednesday.

While the ECB is broadly expected to leave ​interest rates unchanged this ​month, money markets were last pricing in roughly three rate hikes ‌from the central bank by the end of the year. Investors will also be watching closely for any comments from policymakers about the impact of the Iran war on the economy and monetary policy.