European sovereign bonds are under pressure, and the published research consensus points to higher Bund yields ahead.
Researchers tie the Bund selloff directly to energy-driven inflation from unresolved Middle East tensions. With German 10-year yields already above 3.1%, one camp of analysts argues yields are likely to stay elevated or rise further until either the conflict de-escalates durably or energy prices drop meaningfully. The same logic supports a recently-published view that EUR 5y5y inflation swap rates will keep creeping up, as a fast de-escalation looks unlikely and second-round inflation effects could build.
A separate thread of research projects ECB rate hikes starting in June in response to oil-driven inflation — a path that is straightforwardly bearish for Eurozone government bond prices.
One bright spot: some analysts flag EUR real estate credit as a relative outperformer, citing strong demand meeting strong supply, resilient spreads through tariff volatility, supportive technicals, and improved issuer balance sheets.
The two bearish-bond views differ on mechanism, not direction — they're complementary.