European rates look set to stay high, according to the bulk of recently published research.
The consensus across several research notes this week is bearish for European bond prices: analysts broadly expect the ECB to tighten further, with swap and policy rates staying elevated through the cycle.
One published view sees euro 10-year swap rates holding just above 3% in the months ahead, citing sticky inflation expectations from energy shocks, geopolitical tensions, and the ECB's pivot back to tightening. A separate strand of research expects two 25bp ECB deposit rate hikes in 2026 — in June and Q3 — lifting the rate to 2.5%, arguing that Middle East energy spillovers and investment-led growth will keep eurozone inflation above target into 2027. The same camp sees a follow-up refinancing rate hike in September as the base case.
A more contrarian thread adds a conditional upside risk, pointing to the ECB's 2011 episode as precedent for hiking even when real incomes are squeezed — if inflation keeps climbing.