European bond yields look set to grind higher, according to the published research consensus this week — with France the clear pressure point.
Researchers broadly expect the ECB to lift its deposit rate toward 3.00% into 2027, citing sticky energy-driven inflation and geopolitical disruption. Euribor already sits 80–90 basis points above pre-conflict paths. One camp projects German 10-year Bund yields ending 2026 near 3.30% and Spanish yields around 3.80%, underpinned by restrictive policy and heavy fiscal spending. Analysts note that weaker disinflation from goods prices forces the ECB to stay tight for longer.
The sharpest focus is on France. Multiple research notes highlight the OAT-Bund spread pushing past 140 basis points on budget and deficit worries, with some warning of further overshoot and periphery contagion — though one view suggests the move may already be stretched.
A contrarian thread argues French fiscal stress will actually constrain the ECB from delivering all priced hikes, pointing to lower eurozone short-dated swap rates by next April. Less a true disagreement than a difference in horizon.