Why the bond market won’t bounce back to pre-war levels

The war-driven selloff in global bond markets may see a partial rebound but is unlikely to fully recover as energy prices and inflation run hotter for longer, keeping yields elevated. Expect persistent upward pressure on interest rates and reduced capital appreciation for sovereign and high-grade bonds, supporting a risk-off stance and caution on duration exposure.

Analysis

The war-driven selloff in global bond markets may see a partial rebound but is unlikely to fully recover as energy prices and inflation run hotter for longer, keeping yields elevated. Expect persistent upward pressure on interest rates and reduced capital appreciation for sovereign and high-grade bonds, supporting a risk-off stance and caution on duration exposure.