FXStreet reports that economists at ABN Amro forecast Bund yields to remain elevated for a few months.

“Even though we think that the spillover from the US is coming to an end, a further acceleration in eurozone inflation in the near term is likely to put a bit more upward pressure on yields. Indeed, we forecast inflation to rise a bit higher over the coming months and think headline inflation could rise to around 4% at the end of this year.”

“At the start of next year, we expect inflation to fall sharply, and this should again push Bund yields lower. Moreover, we forecast inflation to be below the ECB’s target over the medium-term. We foresee a gradual decline in the 10y Bund yield towards -0.30% in Q1 2022 and to -0.40% in Q2 2022 and expect it to remain at that level for a while.”