European sovereign yields look set to grind higher across the curve over coming quarters, according to the current research consensus — with a steepening bias building even as the short end sends mixed signals.
The dominant driver, researchers argue, is continued ECB tightening. Several published views expect a final 25bp hike at the September 2026 meeting, citing sticky core inflation, persistent goods prices, and supply bottlenecks. One camp notes that while June HICP came in soft and markets have trimmed September odds, revised ECB projections may still show a core overshoot. On a strategic horizon, published forecasts point to German 10Y Bund yields rising from 2.6% toward ~3.1%, French OAT yields to 2.1–2.2%, and Italian BTP yields to ~2.6%, underpinned by policy normalization and fiscal pressures. Analysts also flag added steepening in the Dutch curve tied to large pension fund transitions.
At the short end, views diverge by horizon, not direction: some see 2Y Bund yields easing as hike bets fade, while others expect a brief lift from a September 2026 hike before ECB cuts in 2027 pull them lower.