09/05/25 12:13:06

Bonds: “Safe haven”? No longer so important

Risk appetite is back: while the DAX has climbed to a new all-time high, German government bonds, which were considered a safe haven, are no longer so sought after. In trading with corporates, there is a lot of focus on large companies such as Telekom or Fresenius.


9 May 2025 FRANKFURT ( Börse Frankfurt). Talks between the US and China, trade agreement with the UK - the signs are pointing to an easing of the trade conflict. “US President Trump has lost some of his terror, so 'safe havens' are no longer in such high demand,” explains Arthur Brunner from ICF Bank. “The trade agreements between the USA and the UK have weighed on the prices of US government bonds,” reports Tim Oechsner from Steubing AG.

The yield on ten-year German government bonds rose week-on-week to 2.58 percent on Friday morning. A week ago it was still 2.47 percent. Ten-year Treasuries are currently yielding 4.37 percent after 4.30 percent last Friday.

Arthur Brunner

Arthur Brunner

USA and Europe: monetary policy is diverging

The US Federal Reserve's decision on Wednesday did not make any major waves: as expected, the Fed left key interest rates unchanged - despite repeated calls from US President Trump to cut interest rates. According to Fed Chairman Powell, the central bank is in no hurry to cut interest rates. The Bank of England, on the other hand, has continued to cut interest rates.

“This week has shown that the monetary policy thrusts in Europe and the USA are diverging”, notes Helaba analyst Ulrich Wortberg. The US Federal Reserve is still showing no signs of hurrying to ease its monetary policy, while the Bank of England and the ECB are on a cautious course of interest rate cuts. Signals as to how things could continue in the USA are expected from the US inflation figures for April, which are due next week.

“Customs policy remains the driver”

According to Commerzbank analyst Hauke Siemßen, the development of US tariff policy will remain the most important driver for the bond market in the coming weeks. “Obviously, many are betting that the US will soon conclude trade agreements with some countries.” The yield on ten-year German government bonds is likely to remain within its recently established trading range of around 2.5 percent for the time being. The bank does not see the risk of rising yields until later in the year.

Corporate bonds: classics are gaining ground

Trading in corporate bonds is calm. Gregor Daniel from Walter Ludwig Wertpapierhandelsbank reported purchases of bonds from Deutsche Telekom maturing in 2032 (XS2987630873), Mercedes-Benz 2031 (DE000A3LH6U5) and Fresenius Medical Care 2028 (XS3036647694). These currently yield 3.02 percent, 3.12 percent and 2.97 percent respectively. ICF trader Brunner sees good turnover in the new bond from Berlin-based financial services provider Smava. This has a variable interest rate and runs until 2029 (NO0013531590). 

Gregor

Gregor Daniel

UBM with green hybrid bond, news from Homann

According to Daniel, the UBM Development (AT0000A3FFK1) bond maturing in 2029 will be sold. “This is probably in connection with the new issue,” he suspects. UBM completed the issue of its first green hybrid bond this week, with a coupon of 10 percent. The company develops timber construction projects in Europe, focusing on green and “smart buildings” in metropolitan regions such as Vienna and Munich.

According to Daniel, the subscription period for a new bond from Homann Holzwerkstoffe GmbH (NO0013536169) also begins today. The term runs until 2032, with a coupon of 6.5 to 7.5 percent. The existing bond maturing in September 2026 with a coupon of 4.5 percent (<DE000A3H2V19>) is to be refinanced ahead of schedule; there is an exchange offer. The subscription period is expected to run until 19 May.

By Anna-Maria Borse, 9 May 2025, © Deutsche Börse

Anna-Maria Borse is a financial and business editor specializing in the financial market/stock exchange and economic topics.

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