Markets price in higher ECB tightening as energy costs rise, with traders expecting the deposit rate to reach about 2.68% by year-end, implying two more hikes and roughly a 70% chance of a third.

Euro zone government bond yields rise toward recent peaks as energy concerns persist after troubled energy talks, with Brent crude trading above $100.

Near-term easing expectations increased, with roughly a 45% probability of an ECB rate hike in April, up from about 25% previously.

Analysts note oil exposure remains a risk, but the broader economy is less oil-dependent than in the 1970s, potentially limiting long-term damage.

Despite energy shocks fueling fears, long-term macro risk is seen as contained, with reduced oil dependence over time cited by some analysts.

Fitch reaffirmed France's A+ credit rating with a stable outlook, supporting investor confidence amid tensions.

France’s A+ rating and stable outlook from Fitch underpin relative strength in French spreads despite wider energy concerns.

Markets remain cautious about escalation but view a full-scale war as unlikely in the near term, with energy prices continuing to influence pricing.

Analysts suggest that while uncertainty persists, spreads may narrow over the longer term even as near-term energy-price constraints stay a key risk.

ECB expectations stay hawkish despite the energy shock, as yields and spreads show sensitivity to the policy-rate outlook.

Italy’s 10-year yield rose toward multi-year highs while the Italy-Germany spread widened, signaling persistent per-country sensitivities to energy prices.

Germany’s 10-year Bund yield climbed toward higher levels, with two-year yields also rising, reflecting tighter monetary expectations.