Bonds: “Higher Yields Attract Investors to Foreign Currencies”
Easing price pressure in the U.S. is having only a brief impact on the bond market. In quiet summer trading, foreign-currency bonds are in demand, while two bonds issued by a wind power pioneer are plummeting following the company’s filing for bankruptcy.
July 17, 2026. FRANKFURT (Deutsche Börse). The conflict in the Middle East has once again taken full hold of the markets. The latest U.S. attacks on Iranian targets and the associated concerns about potential damage to oil infrastructure have led to rising oil prices and bond yields. Against this backdrop, the U.S. inflation data—which came in significantly lower than expected—took a back seat. “Normally, the figures would have boosted the market, but right now the focus is more on the political situation,” explains Arthur Brunner of ICF Bank. The low inflation rate is viewed merely “as a snapshot.” Looking ahead, the ongoing conflict is fueling fears of higher inflation rates and, consequently, interest rate hikes by central banks.
Here in Germany, in particular, yields continue to rise. The yield on 10-year German government bonds currently stands at 3.14 percent, up from 3.04 percent the previous week. Three weeks ago, it was still at 2.85 percent. According to Ulrich Wortberg, conditions in the bond market remain challenging. Looking at the benchmark Bund future, the Helaba analyst points to the intact downward momentum. “If the price falls below the 124.50-point level, a pullback to the contract low of 123.77 points cannot be ruled out,” he warns. He sees the recent highs and the 55-day moving average in the range of 125.74 to 125.83 points as resistance levels for the German bond price barometer.
Foreign-currency bonds top the sales charts
With trading slowing down due to the summer break, currency-denominated bonds are currently in high demand. Brunner reports strong trading volume in an AUD bond issued by the Kreditanstalt für Wiederaufbau (AU3CB0296598). The bond matures in February 2029 and offers a yield of 4.6 percent. “The Australian dollar is in high demand because the currency is relatively stable and yields are significantly higher than here,” says the trader. The top-selling bond, however, is a U.S. Treasury bond maturing in 2044 (US912810RH32), which yields 5.2 percent. “We’ve been seeing significant purchases from retail investors here for weeks.” Due to its long remaining term, the bond exhibits relatively high volatility. Since its issuance in the summer of 2014, the price has fluctuated between 73 and 140 percent.
Arthur Brunner
In the corporate bond segment as well, the focus is on U.S. dollar-denominated securities. The portfolio includes a Toyota Motor Credit Corp. bond maturing in 2033 (US89236TQF56) with a 5.1 percent yield, as well as two Amazon.com Inc. bonds maturing in 2046 (US023135EF90) and 2056 (US023135EG73), respectively, each yielding 6.1 percent. “Investors are looking for well-known issuers,” Tim Oechsner of Steubing AG tells us.
Gregor Daniel of Walter Ludwig Wertpapierhandelsbank speaks of “overall very modest trading volumes” this week. A newly issued bond from CA Immobilien Anlagen AG (XS3398037146) is particularly in demand. The bond offers a yield of 3.9 percent until 2029. Also on the shopping lists is a bond from Deutsche Pfandbriefbank (DE000A382665) maturing in just over two years, which offers a yield of 4.1 percent.
SoWiTec bonds plummet after insolvency filing
Two bonds issued by SoWiTec group GmbH suffered a massive price drop midweek after the wind power pioneer filed for bankruptcy. Brunner explains that the bonds were subsequently “converted to flat” for the time being. This means that the price is calculated without accrued interest. In addition, all buy and sell limit orders on the market were canceled. Trading then resumed. The bonds, which had previously been trading at 60% and 70% (DE000A30V6L2 and DE000A2NBZ21, respectively), are currently trading at prices between 10% and 14%. “At this level, we’re currently seeing a good mix of bargain hunters and investors who want to get out of these securities,” the trader reports. In Brunner’s experience, it “often takes several years” to determine what percentage of the claims will ultimately be paid out.
By Thomas Koch, July 17, 2026, © Deutsche Börse AG
About the Author
Thomas Koch is a CEFA investment analyst, investment specialist for structured products, and certified certificate advisor. Since early 2006, he has been covering capital market events as a freelance journalist.
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