Investors expect euro zone bonds to be badly hit in the coming months as the European Central Bank starts turning off the money taps after years of unprecedented largesse, a Sentix poll shows.
Years of massive debt purchases and negative ECB interest rates may be coming to an end, according to signals from the bank.
This resulted in the monthly survey, conducted on July 6-8, showing investors were more pessimistic than ever before about the impact of central bank policy on the European bond market.
"For a few months now, it has been clear to investors that the ECB must leave its expansive course," Sentix, a research institute that specialises in market sentiment and behavioural finance, said in a statement.
"This expectation has intensified for investors over the past few weeks," it added.
Sentix's Central Bank Policy index fell to -26 in July, the lowest level since the gauge was launched in 2005, from -11.5 in June, the survey of 1,022 investors showed.
Yields on euro zone government bonds have already started rising after ECB President Mario Draghi hinted last month at possible policy changes to reflect the euro zone's economic recovery.
Separately, Sentix's gauge of economic sentiment in the euro zone showed some signs of plateauing.
It came in at 28.3 points in July after hitting a 10-year high at 28.4 last month, due mainly to a worsening in investor expectations for the currency bloc's economy. That sub-index fell to 19.8 from 21.
Investors' assessment of current conditions improved further, however, hitting a new 10-year high of 37.3, up from 36 in June.
