Published research is lining up behind a bearish call on European sovereign bonds: Bund yields are seen heading higher on both a cyclical and a multi-year horizon as the ECB tightens further.
On rates, one camp of analysts expects a 25bp ECB hike at the upcoming meeting, with scope for up to four moves in total. Their reasoning: inflation is still above target, wage pressures are building, and even traditionally dovish council members have signaled the need to re-anchor expectations. Denmark's central bank is expected to follow the ECB higher in lockstep.
On Bunds specifically, the research consensus ties near-term yield upside to oil and energy costs, while flagging structural drivers — defense spending, the green transition, and reshoring investment — as keeping upward pressure on yields for years. The framing is that fiscal dominance is gradually replacing monetary support.
A partial offset some recently-published views highlight: European banks are rolling legacy ~1% bond holdings into ~3% coupons, lifting net interest margins — though that's a bank earnings story, not a sovereign yield call.