Bonds: “Trading remains prone to volatility”

Today's US consumer price figures promise at least some relief from the Federal Reserve's “blind flight.” This is important because next week the Federal Reserve must decide on the key interest rate. The European Central Bank is also meeting.
 

October 24, 2025. FRANKFURT (Frankfurt Stock Exchange). The sharp rise in oil prices is fueling inflation concerns. On Wednesday evening, US President Donald Trump imposed new sanctions directly against Russia, specifically against Rosneft and Lukoil. This is causing yields to rise. Ten-year German government bonds yielded 2.62 percent on Friday afternoon, up from 2.55 percent last Friday. In mid-September, however, they were temporarily above 2.70 percent.

Meetings of both the ECB and the US Federal Reserve are scheduled for next week. “It would come as no surprise if the ECB leaves the deposit rate at 2 percent again on Thursday,” explains Ulrike Kastens from the fund company DWS. However, she points to factors that could still influence the central bank's future course, such as the stagnating economy in the eurozone, political developments in France, and a possible decline in oil prices. “Against this backdrop, we still see a chance that the ECB's cycle of interest rate cuts is not yet over.”

Due to the shutdown, the US Federal Reserve has been “flying blind” for weeks, with no data releases. Therefore, this afternoon's US consumer price figures for September are eagerly awaited.

France's yield spreads remain stable at a high level

France also remains a topic of discussion due to its high level of debt and fragile political situation. Moody's credit rating review is on the agenda today, Friday. Standard & Poor's, Fitch, and Scope had already downgraded France's rating recently. “However, this did not have a major impact this week,” reports Brunner. The yield spread between French ten-year government bonds and German bonds is currently 81 basis points.
According to Brunner, there is increased demand for government bonds denominated in Norwegian kroner this week. “This is likely to be related to the rise in oil prices,” he suspects. One example is the bond maturing in 2027 with a coupon of 1.75 percent, which currently yields 3.85 percent (NO0010786288). 

Brunner reports good trading volume in the equally new bond from Neue ZWL Zahnradwerk Leipzig with a coupon of 9.875 percent and maturity in 2030 (DE000A4DFSF4). The price is currently at 100 percent. “There was also more activity in the old bonds (DE000A383RA4, DE000A351XF8, DE000A3MP5K7),” he adds. 

Hertha: Partial repayment and term extension

There was also a lot going on this week with regard to Hertha BSC (SE0011337054). “At the beginning of the week, a single order led to sharp movements, then Hertha announced a partial repayment plus term extension,” explained Brunner. The second division soccer club is planning a voluntary public buyback offer at 100 percent of the present value for up to €20 million of the total €40 million. For the remainder, the adjustments to the bond terms will apply from November 7: a term extension until November 2028 and an interest rate reduction from 10.5 to 6.5 percent. The bond is currently suspended from trading.

LR Health & Beauty and Pandion hit hard

According to Daniel, LR Health & Beauty (NO0013149658) bonds also took a sharp dive. The company reported a breach of its leverage covenant, a specific ratio of net debt to EBITDA, as of the reporting date of September 30. In addition, the interest payment due on November 30 is to be deferred. A “renowned company” is now to prepare a restructuring report. After previously exceeding 80 percent, the price fell to 52 percent. “Nothing is happening now; everyone who wanted to sell has sold,” Daniel notes.

According to Brunner, the Pandion AG bond (DE000A289YC5) also remains very volatile. Last week, the real estate developer announced the conclusion of a financial agreement with an investor in the amount of €100 million as part of the ongoing restructuring of its financing.