Bonds: “Corporate bonds are coming into focus”

Geopolitical tensions continue to shape market developments. On the bond market, however, investors are now reacting with greater composure. Interest is focused on corporate bonds.

April 24, 2026. FRANKFURT (Deutsche Börse). Hopes for a prompt end to the Iran conflict have not been realized this week. “The ups and downs on the bond markets continue. Geopolitical risks have a firm grip on the capital markets,” explains Ilona Korsch of Hauck Aufhäuser Lampe. Because the situation in the Strait of Hormuz remains deadlocked, yields have tended to rise slightly again. Two-year German government bonds are currently yielding 2.59 percent, up from 2.51 percent last Friday. The yield on 10-year German government bonds briefly slipped to 2.94 percent, but is now trading at 3.03 percent, back at the previous week’s level.

“A wait-and-see approach remains the best strategy”

However, the extent of price fluctuations has noticeably decreased. “It appears that market participants as a whole are reacting significantly less nervously to the volatile news situation in the Middle East than they were just a few weeks ago,” says Elmar Völker of LBBW. In his view, this is also due to the fact that “the risk of abrupt monetary policy adjustments by the major central banks has decreased.” With the upcoming meetings of the ECB and the Fed, as well as the central banks of Japan and the UK, the motto “wait-and-see remains the best strategy” is likely to apply.

According to Völker, an imminent monetary policy tightening is now considered highly unlikely for all major central banks. ECB President Lagarde recently stated that “more data” is needed to assess the monetary policy implications of the war in Iran. Robert Greil shares this view. The chief strategist at Merck Finck expects “more words of concern than action” from both the Fed and the ECB.

Deutsche Bahn Bonds in Demand

In this environment, German government bonds and U.S. Treasuries are “trading in both directions depending on the news,” as Raffaele Antacido of ICF Bank reports. The situation is the same in the corporate bond segment for the BMW Finance bond (XS2625968693), which matures in November. The trader, however, reports strong demand for the Deutsche Bahn bond (XS1045386494) yielding 2.8 percent and maturing in 2029. Antacido sees selling pressure on the Heidelberg Materials bond (XS2577874782) maturing in 2032, which currently offers a yield of 3.4 percent.