European bond yields look set to grind higher, according to the bulk of research crossing the desk this week.
The published consensus points to upward pressure across the euro curve. One camp of analysts expects the ECB to hike the Deposit Facility Rate by 25bp in Q3 2026, arguing Eurozone inflation will rebound to around 2.7% in 2026 — well above the 2% target — as services inflation stays sticky and activity holds up. Related research sees euro area inflation above target through 2027, ruling out a quick return to policy normalcy.
A separate strand of recent research frames it as a global steepening story: fiscal pressures, stubborn inflation expectations, and potential further ECB hawkishness push 10-year Eurozone yields higher into year-end. Others focus on the short end, arguing that as excess liquidity drains and the ECB weighs doubling minimum reserve requirements, Euribor and OIS rates drift toward the main refinancing rate.
The contrarian thread: some recently-published views flag softer CPI prints and a more dovish ECB tone as evidence disinflation still has room to run — a genuine split on the inflation path.