European bond yields look set to keep grinding higher, according to most recently published research — though a notable minority sees relief ahead.
The consensus case: researchers point to a hawkish ECB that hiked 25bp in September and signaled more to come, with staff projections showing inflation above 2% through 2028 on energy shocks tied to the Middle East and Russia/Ukraine. Analysts note the 10-year Bund has reached 3.5%, a 17-year high, and see further upside unless energy calms. Several published views tie elevated Bund and French OAT yields to fiscal deterioration and ongoing ECB tightening, with France flagged for multi-decade OAT highs amid political paralysis. The France-Germany spread has widened to levels unseen since the eurozone debt crisis.
On policy, most researchers expect one to three more ECB hikes, potentially taking rates to 3.25% if energy stays high.
The contrarian thread: one camp argues 5–10 year German yields are cheap and will fall in coming months as volatility subsides. And the ECB's own 2026 projections point to gradual declines as inflation cools.