Bonds: No major jumps
Bond trading continues to run smoothly, with little change in yields. There is much discussion about the US Federal Reserve's next move. In the corporate bond market, well-known names remain in demand, both for short- and long-term bonds.
15 August 2025. FRANKFURT (Börse Frankfurt). Key topics in bond trading are geopolitics – specifically the Trump/Putin meeting today – and the likelihood of interest rate cuts in the US. “According to the latest US inflation data, the probability of interest rates falling in September is now priced at 96 percent,” reports Tim Oechsner of Steubing AG. However, bond trading is currently quiet. “Liquidity remains low,” explains Oechsner, referring to the “summer slump.” Closing transactions are correspondingly difficult, and bid-offer spreads are wider.
The sideways movement of yields on ten-year German government bonds in the range between 2.60 and 2.70 percent continues. On Friday afternoon, ten-year German government bonds yielded 2.7 percent, down from 2.65 percent a week ago.
“Trump is likely to feel vindicated in his calls for lower key interest rates.”
In recent weeks, expectations had risen that the US Federal Reserve would soon lower key interest rates. The inflation figures for July published on Tuesday offered both positive and negative aspects in this regard. The overall inflation rate rose only moderately, but the core rate rose more strongly than expected. “US President Trump is likely to feel vindicated in his calls for lower Fed key interest rates,” explains LBBW analyst Katja Müller. “In our opinion, however, this does not justify pushing for interest rate cuts,” says Helaba analyst Ulrich Wortberg. There is, however, agreement on concerns about the reliability of US data following the dismissal of the US statistics chief. “The appointment of Antoni, a critic of the agency, as head of the BLS statistics agency is causing unease,” comments Wortberg. It will become more difficult to make the right monetary policy decisions.
In trading in government and government-related bonds, US Treasuries maturing in 2044 are in demand, as Oechsner reports. Also sought after: bonds from the European Stability Mechanism (ESM) maturing in 2035 (EU000A1Z99W5).
Telekom, Bahn, Nestlé, and Eon in demand
According to Oechsner, bonds from Deutsche Telekom maturing in May 2026 (XS1617898363), Deutsche Bahn maturing in 2037 (XS2577042893) and Nestlé bonds maturing in 2041 (XS2350744434) are in high demand. The Eon bond maturing in 2044 (XS2791960664) is immediately repurchased when prices fall, as observed by Gregor Daniel of Walter Ludwig Wertpapierhandelsbank.
Tim Oechsner
According to Oechsner, US dollar-denominated securities from BMW US Capital maturing in August 2026 (USU09513JF73) are also in high demand.
Biosimilar developer Formycon confirmed its annual forecast on Wednesday following a business performance in line with expectations. “There were no nasty surprises,” notes Daniel. Last week, the bond issued in July was on the sales lists (NO0013586024) – without any news. “This week, the selling pressure has clearly eased,” explains Daniel.
Many new issues in the first half of the year
According to Oechsner, the market for new issues is also in a quiet phase. “The credit markets entered the summer break with spreads close to their lows for the year,” according to DekaBank's monthly report. Hopes for an acceptable solution to the tariff dispute had a positive effect on spread development, as did the slowly improving economic outlook. Several new issues were placed by mid-July and met with strong demand. “As a result, the new issue market even exceeded the strong previous year's results for both investment-grade and high-yield bonds in terms of volume at the end of the first half of the year.”
By Anna-Maria Borse, 15 August 2025, © Deutsche Börse AG
About the Author
Anna-Maria Borse is a financial and business editor specializing in financial markets/stock exchanges and economic issues.
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