Bonds: ‘Yields in recovery mode after brief setback’

Worries of an escalation quickly ticked off

Later in the week, however, the tide turned and yields climbed back up to 2.17 per cent. ‘The fear of an escalation in the Middle East has dissipated somewhat,’ states Arthur Brunner from ICF Bank. In addition, the still relatively high core rate of inflation data, rising oil prices and the economic data in the USA, which was not quite as bad as expected, took some of the euphoria about further significant interest rate cuts out of the market. In this context, Fed Chairman Jerome Powell emphasised that the latest interest rate cut campaign should not necessarily be seen as a benchmark for future easing measures. As a result, the ten-year US yield rose from a weekly low of 3.70 per cent to 3.85 per cent.

Further developments on the bond markets are also likely to be influenced by this afternoon's US labour market data for September. According to Commerzbank, this week's data will be ‘the decisive signpost for the future course of the US Federal Reserve's monetary policy’. In the run-up to the figures, Tim Oechsner from Steubing AG reports very quiet trading overall. ‘Investors are staying on the sidelines, the volume of demand is relatively low’. 

Mutares bonds in demand after price slump

At ICF Bank, Arthur Brunner registered the highest turnover in two Mutares bonds. The investment holding company was recently the victim of a short-seller attack. Compared to the share price, the recovery in Mutares bonds has so far been rather moderate. The bond maturing in 2027, which currently offers yields of around 13 per cent at a price of around 99 per cent (NO0012530965), has been the most actively traded. A bond from Booster Precision Components (NO0012713520), which is also in demand, offers similar yield opportunities. The new bond from Grenke Finance, which matures at the beginning of 2029 and has a coupon of 5.0 per cent, is also in demand. The company reported convincing quarterly figures this week (XS2905582479).