European government bonds are under pressure, with published research this week pointing to rising yields on German Bunds, French OATs, and UK Gilts.
Analysts point to a convergence of forces pushing yields higher: a wave of global bond supply, risk-off flows tied to Middle East tensions, and growing fiscal worries across Europe. For French OATs, the research consensus emphasizes budget anxiety on top of the supply glut. For Bunds, geopolitical caution and regional fiscal concerns amplify the same dynamic. For Gilts, researchers highlight a stark warning from the Office of Budget Responsibility that stabilising UK debt at 95% of GDP would demand politically unrealistic fiscal tightening.
A separate thread of recent research flags a conditional wrinkle for Gilts: if the Bank of England eases regulation — for example, excluding gilts from bank leverage ratios — bank demand could structurally lift prices. But that upside would be partly offset if new minimum haircuts on gilt repos curb hedge-fund demand. The net effect hinges on how the BoE calibrates its next move.