Bonds: “A very volatile week”

Concerns about excessive AI investments, the lack of US interest rate cuts, and geopolitical issues have shaken the stock markets this week. German government bonds are in demand, but US bonds are not.

January 30, 2026. FRANKFURT (Deutsche Börse). Stock, gold, and silver price rallies, followed by price slumps and extreme US dollar weakness – there is a lot going on in the capital markets. “It was a very volatile week,” explains Rainer Petz, who trades bonds for Oddo BHF. In view of the turbulence, German government bonds, which are considered safe, are once again in demand. Ten-year bonds yielded 2.85 percent on Friday afternoon, down from 2.90 percent the previous week.

One reason for the fluctuations: Microsoft's quarterly figures, published on Wednesday evening, were not convincing. But that was not all. “Geopolitical issues remain present with concerns about a possible US military strike against Iran,” explains Helaba analyst Ralf Umlauf. “Risk aversion could increase further at any time.”

Central banks in pause mode

The US Federal Reserve meeting on Wednesday brought no surprises. The key interest rate corridor remains at 3.50 to 3.75 percent. However, the issue of Fed Chairman Powell's successor is highly exciting. A decision is expected this Friday morning (US local time). The favorite is now former Fed Governor Kevin Warsh. “The news triggered immediate reactions. Stock prices fell, while yields on US government bonds rose,” notes Raffaele Antacido of ICF Bank. Warsh is considered a monetary policy hawk, meaning he tends to favor rising interest rates. However, he has recently been playing a dovish monetary policy card with US President Trump.

First-ever 20-year German government bonds

A decision is due for the eurozone this coming Thursday. Here, too, no change is expected. “Hardly any analysts anticipate an interest rate change for the rest of the year,” notes Commerzbank analyst Marco Wagner. Given the projections of ECB economists, there is no reason for one.

“German government bonds are in demand across all maturities,” reports Antacido from the trading floor, speaking of a “search for safe havens.” US Treasuries are being sold off across all maturities. The trader also points to a first: a 20-year German government bond has been issued for the first time (DE000BU2T000), with a coupon of 3.4 percent.

Post and BMW in demand

In the corporate bond business, Gregor Daniel of Walter Ludwig Wertpapierhandelsbank sees purchases in the Deutsche Post bond maturing in 2032 with a current yield of 3 percent (XS3084418907) and the BMW bond maturing in 2036 with a current yield of 3.75 percent (XS3280519318). According to Daniel, DEAG Deutsche Entertainment (NO0013639112) shares fell in the meantime after the company announced that it had now completely taken over Wizard Live. “That didn't go down well everywhere, and there was a wave of selling due to stop-loss orders.” The price fell to 94 percent, but by Friday afternoon it was back to 100 percent. 

LR Health & Beauty (NO0013149658) has seen more significant price losses. The company has once again revised its profit estimate for 2025 downward and plans to restructure its bond, including a 55 percent debt cut. The share price fell by up to 25 percent and was down 33 percent on Friday afternoon.  

ABO Energy (DE000A3829F5) initially recovered but then lost ground again, as Antacido also reports. “The company is entering into a standstill agreement with its creditors, the first step in implementing a restructuring plan.” Following a loss forecast for 2025 in November, the share price had already fallen from 100 to 50 percent and is currently at 16 percent.