investingLive European markets wrap: Oil holds higher, regional yields push up

Headlines:Oil prices jump as US and Iran exchange strikes; prolonged stalemate keeps the downside limitedIran says US must bear full responsibility for consequences of escalationIRGC claims that a supertanker has caught fire after being struck by naval mines in Strait of HormuzUS futures keep lower to start the new weekThis gold analysis may be showing new gold buyers coming in todayGold erases most of the Treasury-led gains as Fed Chair Warsh retightens financial conditionsGerman states see higher inflation prints in AugustHeads up: Month-end flows might factor into play in the day aheadMarkets:WTI crude oil up 3.7% to $86.50JPY leads, USD lags on the dayGold up 0.1% to $4,457European indices mixed; S&P 500 futures -0.2%US 10-year yields flat at 4.724%Germany 10-year yields up 2 bps to 3.31%, highest since 2011It was a slower session in terms of headlines as markets continue to make do with Fed chair Warsh's hawkish twist on Friday last week.Month-end might be making for some caution as there wasn't too much in it in terms of market moves, so far today at least.Oil prices continue to hold higher after the US and Iran exchanged military strikes through the weekend. Tensions remain high and it's another signal that both sides are nowhere near meeting in the middle just yet. WTI crude is up 3.7% to $86.50 with Brent crude crossing over $91 on the day.In terms of data, we did get inflation numbers from key German states and they were hotter in August than in July. That fits with expectations though of a slightly stronger print for the national reading later. Nonetheless, it doesn't change much of the picture for the ECB going into September but at least reaffirms the pathway.Looking to major currencies, the dollar is a touch softer today with EUR/USD up 0.1% to 1.1600 with large option expiries in play. USD/JPY is down 0.2% to 159.67 while USD/CAD is also down 0.1% to 1.3885.Elsewhere, gold is little changed and sticking around $4,457 after the Friday drop with Treasuries also not up to much. 10-year yields in the US are flat at 4.724% but we are seeing yields in Europe push up further. 10-year yields in Germany are up nearly 2 bps to 3.31%, the highest since 2011, while 10-year yields in France are up to 4.15% - the highest since 2008.With European bond markets responding as such, the pressure will start to build for the ECB as traders are starting to ping a signal on the rates/inflation outlook. This article was written by Justin Low at investinglive.com.