European bond markets are getting a split read from published research: yields broadly under pressure, but pockets of opportunity in core duration and credit.
On sovereigns, one camp of analysts links rising euro area yields directly to two more ECB rate hikes they expect over the next year, driven by sticky inflation and energy risks. A more nuanced thread of recent research argues the eurozone economy is too weak to sustain that view — they're positioning for a steeper Bund curve while still holding a modestly positive bias on 10-year Bund prices, noting inflation risks look less severe than in 2022 and ECB credibility remains intact.
The clearest disagreement is on German 10-year Bunds. Some researchers flag near-term upward yield pressure from a global bond selloff tied to surging oil and US rate bets. Others argue yields could drift lower in coming months if energy prices stay contained post US-Iran — an explicitly conditional call.
On credit, the published consensus has turned constructive: EUR investment grade spreads are seen tightening, with subordinated bank debt flagged as the preferred play on income and stronger capital ratios. France remains a soft spot, with underweight OAT positioning cited on budget and political risks.