Germany's 10-year bond yield hit a fresh 2014 high on Monday, while Italy's risk premium extended last week’s rise as analysts increased their expectations about future rate hikes after recent comments from European Central Bank officials.

Hawkish policymaker Robert Holzmann said on Saturday that the ECB should hike interest rates three times this year to combat inflation.

However, president Christine Lagarde reiterated that "adjustments to the key ECB interest rates will take place sometime after the end of net purchases and will be gradual".

Germany's 10-year government bond yield, the bloc's benchmark, was up 1 basis point at 1.152%, after hitting its highest since August 2014 at 1.163% earlier.

"A new sense of urgency among ECB policymakers to respond to the problem of high inflation can be seen clearly in comments from policymakers, particularly over the course of the last week," said George Buckley, economist at Nomura.

Money markets are still pricing in around 95 basis points (bps) of ECB rate hikes by year-end.

"We still view these rate expectations stretched," Commerzbank analysts said, referring to 100 bps tightening by year-end and an almost 25% chance for a June hike.

Italy's 10-year government bond yield rose to a fresh December 2018 high of 3.2%, up 6 bps, with the spread between Italian and German 10-year yields widening to 205.5 bps, its widest since May 2020.

Yield spreads between core and periphery have recently widened as hopes for monetary and fiscal support for indebted Southern European countries faded.

According to ING analysts, "the resumption of supply in shaky market conditions is a prime suspect for the recent move in (euro zone) yields".

"If supply is indeed the reason for the market's angst, the pace of selling will abate mid-week, but that doesn't guarantee a retracement lower in yields," they said in a research note.

Analysts forecast scheduled European government bond supply to be around 22 billion from euro zone countries, while the EU will syndicate a New Generation Fund (NGEU) bond.

Investors await U.S. inflation data for April, which might provide more signals about the future monetary tightening path of the Federal Reserve.

"This week's U.S. inflation report could provide some relief as headline and core inflation are likely to level off," Commerzbank analysts said.

However, "the Fed is unlikely to be impressed by headline inflation still at 8% and core inflation at 6%", they added.

(Reporting by Stefano Rebaudo, editing by Emelia Sithole-Matarise)