European government bond yields look biased lower according to research published this week, with falling crude oil doing much of the work by easing near-term inflation worries.
One strand of published analysis argues that softer oil is reducing inflation pass-through risk, and pairs that with the ECB's recent shift toward a more neutral stance to project lower German 10-year Bund yields into 2027. A separate camp of researchers agrees rates should drift back toward neutral by 2027, but expects the ECB to squeeze in one more hike first — with July flagged as the likely window.
Other recently published views push that hike later, to September, arguing sticky pipeline inflation and elevated inflation expectations make a pause harder to justify. The same work looks for the euro swap curve to steepen modestly through 2026 as Middle East risk, EU–China trade friction, and pending European fiscal plans lift term premia.
A more dovish read notes markets have already trimmed hike bets after a soft Flash CPI print and balanced remarks from ECB President Lagarde — less than a full hike is now priced by November.