91% probability the German 10-year Bund yield closes calendar 2026 at or below 4.50% — a ceiling about 123 basis points above the 3.27% of mid-August, itself the highest level since 2011. This is a ceiling locked against a rising market, and the brief says so.
The German 10-year Bund yield rose to 3.27% on 19 August 2026, its highest since 2011, driven by fading hopes of a quick resolution to the Iran conflict, higher oil prices and revived concern about persistent inflation. Our ceiling sits about 123 basis points above that level.
We lock a binary: the German 10-year government bond benchmark yield at the final close of calendar 2026 is at or below 4.50%. Confidence 91%.
The Bund sat at 3.27% in mid-August, already its highest since 2011, pushed there by an oil-driven inflation scare tied to the Iran conflict. Our ceiling allows a further 123 basis points before the call fails. Confidence 91%, and deliberately below the tranche's macro ceilings, for the same reason we gave on the Japanese 10-year in P-193: this is a market in a sustained uptrend, and we are locking a ceiling against it rather than with it. What makes 4.50% a reasonable bar is that European long yields at that level would imply a policy and inflation regime materially worse than anything currently priced, and the European Central Bank retains tools that act directly on the long end. Scored on the 10-year benchmark, not the 30-year and not an auction result.
RAOSCAFF locks P-198 on 2026-08-21. Scored against the German 10-year government bond benchmark yield at the final trading close of calendar 2026 versus a 4.50% ceiling.
Locked against a sustained uptrend from a fifteen-year high — an oil-driven inflation scare tied to the Iran conflict is what put it there, and could push further.