U.S. Treasury yields and eurozone government bond yields rose in midday European trading on Wednesday after the Organization for Economic Cooperation and Development raised its global economic forecasts for 2026.

The OECD now sees global economic growth at 2.9% in 2026, versus 2.8% previously, even as it lowered next year's growth estimate to 3.0% from 3.1% previously. Within its estimates, it also raised its U.S. growth forecast for 2026 and 2027, and for the eurozone for 2026.

This could imply higher consumption, and thus higher need for energy at a time when the Middle East conflict hasn't been resolved, even as the prospect of a diplomatic solution for the conflict between the U.S. and Iran has improved.

Investors once again cautiously anticipated a breakthrough in the Middle East after remarks from U.S. President Trump. "I believe we'll make a deal right after the election, because it doesn't make sense for [the Iranians] not to," Trump said.

"Markets continue to err on the side of new momentum for diplomacy between the U.S. and Iran on breaking the energy-choking deadlock," KBC Bank analysts said in a note.

The 10-year U.S. Treasury yield rose 2.3 basis points to 4.989%, according to Tradeweb, reversing earlier falls.

Oil prices also turned higher, with Brent crude last trading at $100.55 a barrel, up 1.3% on the day. Oil prices fell earlier after Saudi Arabia signaled that it is running tests on its East-West pipeline and could restart flows as early as this week. The pipeline, a crucial route circumventing the Strait of Hormuz, was recently closed after drone attacks.

Eurozone bond yields extended their rises. They turned higher earlier after provisional purchasing manager indexes revealed stronger-than-expected eurozone economic activity during September. The dollar also rose, taking the DXY index, which measures the dollar's value against a basket of currencies, to an eight-week high of 100.967 due to expectations of further U.S. interest-rate increases.

The yield on the 10-year German government bond last traded at 3.492%, up 4.3 basis points, while the 10-year French equivalent traded at 4.564%, up 7.5 basis points on the day, according to Tradeweb.

The preliminary eurozone composite purchasing managers' index, a measure of private-sector activity, rose to 53.1 in September, well above expectations of 51.5 in a Wall Street Journal poll and the 50 level that signals expansion in activity. Individual French and German purchasing managers' surveys were also stronger than expected.

The next major political catalyst will be the summit between Trump and his Chinese counterpart Xi Jinping later this week.

"Markets have already begun to price in some optimism around U.S.-China talks, particularly following reports of progress on tariffs and AI," said Patrick Munnelly, market strategist at Tickmill Group.