European bond yields drifted higher this week as published research coalesced around a hawkish ECB path, even as growth signals weakened.
Multiple research notes argued the ECB is likely to deliver three — possibly four — 25bp rate hikes over coming quarters, with the first move pencilled in for June. The rationale shared across desks: headline inflation pushing toward 4% by autumn on sticky energy costs and supply-side pressure, plus a credibility motive for Frankfurt to act even with growth softening. One forecast cited sees euro area 10Y yields climbing from 2.6% to around 3.1% into 2026.
Bunds were caught in the global rates updraft alongside US Treasuries, though a contrarian thread late in the week suggested European rates may actually have more room to rally than US peers, given weaker PMIs and the region's energy exposure.
On credit, switch ideas circulating in published research leaned constructive on selected utility, auto and bank names (TenneT, EDF 2029/2032, BMW 2035, Crelan, Sabadell) and cautious on longer-dated or lower-coupon paper.