Bonds: “Get out of US bonds”
Donald Trump is causing great uncertainty and US bonds are no longer a “safe haven”. As a result, yields are rising significantly. German short-dated bonds and selected corporate bonds are being bought in return.
11 April 2025. FRANKFURT (Börse Frankfurt). The US President's abrupt change of direction in the tariff conflict with the rest of the world has weighed heavily on prices on the US bond market, particularly at the long end. Yields on 30-year US Treasuries are on the verge of their sharpest weekly rise since the early 1980s and ten-year government bonds also rose sharply over the week from 3.98% to 4.42%. Shortly after “Liberation Day” at the beginning of the month, the “flight to safe havens” had initially pushed yields here down to 3.87%.
Analysts see “strange price capers”
Klaus Stopp, a long-standing bond trader at Baader Bank, fears that Donald Trump's actions will cause “lasting damage to the USA because reliability is no longer a given”. The current trend of “getting out of US bonds” could also be accelerated by the fact that some market players have had to sell highly liquid bonds as a result of margin calls. The analysts at LBBW also cite market observers who “speculate about an erosion of the ‘safe haven status’ as well as massive sell-offs by hedge funds due to margin calls or in the course of the liquidation of so-called basis trades” in view of the “strange price capers”.
Triple A rating of the USA in danger?
Hauck Aufhäuser Lampe is already concerned about the USA's top rating as a bond debtor. "It remains to be seen whether the USA can afford a possible credit rating downgrade. This would have considerable consequences for the pricing and refinancing of all issuers". The strategists do not expect normality to return to the capital markets for some time. “The economic damage is already underway and the loss of investor confidence in the USA is increasing”. A trend that Donald Trump is unlikely to like either. After all, government bonds worth several trillion dollars are due to be refinanced in the USA this year. The costs incurred for this in the form of interest payments are currently rising massively.
Auto bonds are being bought
Stopp sees “almost no more buy orders for US securities” with regard to current bond trading. Instead, there are shifts into German short-dated bonds such as a German government bond maturing in fall 2026, which currently yields 1.8 percent (DE000BU22064). There is also demand for the German government bond maturing in six months with a similar yield (DE0001141828). In the corporate bond segment, there was demand from both Baader Bank and Walter Ludwig Wertpapierhandelsbank for an 18-month VW bond (XS1893631769). Beate Mägerle also reported purchases of bonds from Mercedes-Benz (DE000A2GSLY0) and E.On (XS2791960664). While the car manufacturer's bond matures at the end of 2027 (yield: 2.6%), the utility company will not repay the bond until 2044 as planned. The waiting period is sweetened by a yield of 4.2 percent. On the sell side this week is a bond from Würth (XS2480515662) maturing in 2030 and yielding 2.4 percent.
Hertha BSC changes bond conditions
Raffaele Antacido from ICF Bank reports that at the beginning of the week, there was still an increase in sales of automotive bonds and government bonds after the tariffs were announced by the Trump administration. The list included securities from BMW (XS2625968693) and the Kingdom of Spain (ES0000012M51). A bond originally due in November from Hertha BSC GmbH & Co. KGaA, originally due in November. According to Antacido, this is to be extended by three years and the coupon reduced from 10.5 percent p.a. with quarterly payments to just 6.5 percent p.a. with annual payments. “Investors reacted to this with losses”. The price of the bond fell by around five percentage points in the first half of the week (SE0011337054).
by Thomas Koch, 11 April 2025, © Deutsche Börse AG
About the author
Thomas Koch is a CEFA investment analyst, investment specialist for structured products and a certified certificate consultant. He has been a freelance journalist covering events on the capital markets since the beginning of 2006.
Feedback and questions to redaktion@deutsche-boerse.com
Deutsche Börse 
