European government bond yields have further to climb, according to recent published research — and that's bad news for bond prices across the continent.
Researchers argue the 10-year German Bund yield could rise from around 2.6% today to a peak of 3.4% by mid-2026, driven by firmer eurozone growth and sticky core inflation that slows the ECB's path of rate cuts. Italian BTP yields are seen following a similar trajectory, climbing from roughly 1.8% to a peak near 3.2% by the third quarter of 2026, with slow ECB normalization and lingering questions about Italy's fiscal sustainability keeping a floor under yields.
A separate strand of official research notes that European yields remain above pre-conflict levels, particularly in weaker fiscal jurisdictions, linking that persistence to elevated energy prices and ongoing geopolitical risk. The consensus view is that solid eurozone data lets the ECB stay focused on inflation rather than growth, keeping upward pressure on euro rates.
One implication: BTP-Bund spreads may widen, a soft warning on Italian credit relative to German.