Analyst: The outlook for the eurozone bond market in the near future depends on geopolitical factors and inflation.

LBBW's Elmar Voelker stated in a report that the outlook for the eurozone government bond market in the coming weeks will primarily depend on geopolitical developments and their impact on inflation. The senior fixed income analyst said, "The outbreak of the Middle East war has once again put the inflation issue in focus." He noted that long-term inflation expectations in the euro interest rate market have shown a significant increase. Voelker stated that although the volatility has been relatively low compared to the energy price crisis of 2022-23, "further price spikes could unsettle inflation expectations and trigger more sustained market sentiment changes in the bond market."