European sovereign bond yields look set to drift higher over the next couple of years — that's the dominant view emerging from this week's published research on Bunds, OATs, and BTPs.
The consensus case rests on sticky euro area core inflation and an ECB that researchers expect to keep tightening. One published forecast sees German 10Y Bund yields climbing from 2.3% to 3.1% by late 2026, French OATs from 2.3% to 2.7%, and Italian BTPs from 1.1% to 2.5%. Several analyst camps argue at least one more ECB hike is coming, pointing to firm PMI data and hawkish signals from Lagarde, Lane, and Schnabel.
A contrarian thread pushes back: one strand of recent research argues markets have already repriced enough, and that the ECB policy rate will actually be lower a year out, citing softer energy prices and fading inflation pressure.
One structural note worth flagging — researchers highlight that the 2027 transition of over €900bn in Dutch pension assets is expected to steepen the EUR 10s30s swap curve by 10–20bp in coming months.