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ESM Sovereign Sentiment Survey

Image template Blog The quiet strength of euro area bonds
Market intelligence · Twice yearly

ESM Sovereign Sentiment Survey

Q2 2026

Positive sentiment amid a challenging risk landscape

 

Results from a survey of 31 financial market participants active in euro area sovereign bond markets, conducted between 27 March and 17 April 2026. The sample includes issuers (debt management offices and treasuries), intermediaries, and investors. In addition to the survey, structured interviews were conducted with 18 market participants in April 2026. 

58%

of respondents report positive or very positive sentiment towards euro area sovereign bonds.

 

10%

of foreign investors are seen as more likely to hold negative views than domestic investors.

domestic investors · 3%

85%

Liquidity conditions are viewed as acceptable or good.

 

45%

expect the average maturity of euro area sovereign debt to decrease.

or remain stable · 39%

Overall sentiment towards euro area sovereign bonds is positive …

(share of respondents)

                   

58% positive · 34% neutral · 6% negative

Foreign investors seen as 3× more likely to hold negative view (10%) than domestic counterparts (3%)

… but a challenging risk landscape seen ahead

(share of respondents)

                   

78% cite geopolitics or inflation

Other risks cited:
Fiscal path: 36%
Slowdown: 36%
Price correction: 19%
Trade tensions: 13%

An environment of higher rates expected

 

In 12 months… (shares of respondents, in percent)

European Central Bank rate hikes, (in basis points)
10-year Bund yield, (in percent)
€/USD exchange rate
 
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%

 

A European safe asset could finance common goods

 

Most important factors to achieve foreign capital inflows into the euro area (share of respondents, in percent)

77% of respondents see a permanent European Union safe asset as somewhat or very important for euro area capital markets