MODERATE OUTLOOK FOR THE EUROZONE IN 2026 3/3

The ECB’s shift toward a status quo policy has fundamentally altered the interest rate landscape, rendering previous expectations of yield easing obsolete. Sovereign yields have stabilized, with German Bunds anchoring between 2.6% and 2.8% and Italian BTPs between 3.4% and 3.6%. For investors, this marks a transition to a neutral outlook where performance depends almost exclusively on face-value yields rather than capital appreciation.