European bond yields look set to grind higher, according to the bulk of recently published research — though one contrarian view sees a medium-term buying opportunity in core European government bonds.
The bullish-yield camp points to rising energy prices, resilient euro area activity, and hawkish ECB communication, noting roughly 50bps of upward repricing already in 2- and 10-year euro area yields. Several analysts now expect two more ECB deposit rate hikes, taking the rate to 3% by end-2026, with Dutch gas prices at three-year highs keeping inflation pressure alive. A broader thread of research argues fiscal slippage across sovereigns is lifting term premia globally, with eurozone bonds especially exposed.
The German curve is splitting. Researchers flag the 2-year Bund as most sensitive to front-end momentum, while the 30-year has actually caught a safe-haven bid. The Germany–France 10-year spread has widened to a post-euro-crisis high of 98bps, and published views lean toward underweighting France versus Bunds on fiscal divergence.
The contrarian case: with 10-year Bund yields near 3.5%, some argue aggressive tightening is already priced in — making current levels an attractive medium-term entry.