European Bonds Edge Higher In Yield As Traders Reprice Inflation Risk

Sovereign yields across the euro area firmed as traders positioned for persistent price pressures and delayed policy easing. Benchmark German Bund yields nudged up alongside moves in French OATs and Italian BTPs, reflecting caution ahead of key inflation readings. The repricing echoed concerns that central banks may need to hold restrictive settings longer to anchor expectations. Credit spreads were broadly stable, but duration-sensitive pockets underperformed on the curve. Strategy notes highlighted limited room for dovish surprise without decisive evidence of disinflation gaining momentum across the bloc.