Bonds: “Nervousness Persists”
Yields on government bonds are at their highest levels in a decade and a half—or nearly two decades. However, the upward trend has recently come to a halt. In the corporate bond market, RWE and Depfa are in demand, while Hello Fresh and Deutsche Entertainment are losing ground.
September 3, 2026. FRANKFURT (Deutsche Börse). High oil prices, high inflation, high government debt—yields worldwide remain at their highest levels in many years, or even decades. However, there are now signs of some relief. “The recovery is coming from the U.S.,” reports Rainer Petz, who trades bonds for Oddo BHF.
Following Federal Reserve Chairman Kevin Warsh’s speech in Jackson Hole a week ago, the markets had firmly anticipated an imminent interest rate hike in the U.S. This week, however, those expectations have eased somewhat. Among other factors, this was triggered by remarks from Fed Governor Christopher Waller that did not point to a rate hike. There could be new developments on this front today. The latest U.S. jobs report will be released at 2:30 p.m. German time. The market firmly expects an interest rate hike at the upcoming ECB meeting next week.
U.S. Interest Rates: Levels Last Seen During the Financial Crisis
The yield on 10-year German government bonds briefly rose to nearly 3.40 percent this week. As of Friday at noon, it stood at 3.35 percent, still the highest level since 2011. The yield on 30-year U.S. Treasuries, currently at 5.23 percent, is as high as it was in 2007. “British 10-year government bonds are yielding as much as they did in 2008, and Japanese ones as much as they did in 1996,” notes Robert Halver of Baader Bank.
Corporate Bonds as a New Safe Haven?
The perception of government bonds as safe havens is beginning to show cracks, as DZ Bank notes in its blog. “Persistently high deficits, a backlog of reforms, political uncertainties, and an aging population are weighing on the creditworthiness of many industrialized nations,” the bank states. Many top companies, such as Microsoft and Johnson & Johnson, on the other hand, have stable credit profiles. However, corporate bonds are not suitable as a new safe haven. They lack the market size and liquidity of government bonds. Furthermore, for regulatory reasons, banks and insurers often have to rely on government bonds.
- Learn more: dzresearchblog.dzbank.de
In the bond market, buying interest currently outweighs selling interest, as reported by bond trader Gregor Daniel of Walter Ludwig Wertpapierhandelsbank. “It’s all over the place.” Investors are snapping up French government bonds maturing in 2057 with a current yield of 4.96 percent (FR0014016CV2), for example.
RWE and Depfa in Demand, Calm at VW
According to Daniel, corporate bonds are also performing well. Examples include bonds from RWE maturing in 2037 with a current yield of 4.40 percent (XS3430748676) and those from Deutsche Pfandbriefbank maturing in 2029 with a current yield of 4.28 percent (DE000A3827B8).
While VW shares are rising significantly following the supervisory board’s approval of the restructuring plan, the bond market remains quiet, as reported by Oddo trader Petz and Walter Ludwig trader Daniel. After weeks of disputes, the automaker unanimously accepted large parts of a restructuring plan yesterday, Thursday evening.
Hello Fresh and DEAG Take a Hit
The bond issued in July by meal-kit delivery service HelloFresh (XS3435244804) took a sharp hit, as reported by Petz. It is now trading at just 86 percent of its face value. The company is struggling to attract new customers. In the second quarter, revenue declined, and adjusted operating income plummeted.
According to Daniel, DEAG Deutsche Entertainment (NO0013639112) has also suffered significant losses. The reason is a cash capital increase by the Apeiron Investment Group, which would thereby become the majority shareholder. This would trigger a right of termination for bondholders. “The company is asking bond investors to waive their right of termination,” reports Daniel. In exchange for this waiver, DEAG is offering a one-time compensation of 0.10 percent of the bond’s face value.
“Foreign Currencies Increasingly in Demand”
Foreign-currency bonds also remain a topic of interest. “They are increasingly in demand,” explains Daniel, citing the Turkish lira, Brazilian real, and the Canadian, Australian, and New Zealand dollars as examples. The Turkish lira-denominated bond issued by the European Bank for Reconstruction and Development (XS3457420423)—maturing in 2028 and currently yielding 39 percent—continues to be purchased. However, inflation in Turkey still stood at 31.8 percent in July.
By Anna-Maria Borse, September 4, 2026, © Deutsche Börse AG
About the Author
Anna-Maria Borse is a finance and business editor specializing in financial markets, the stock market, and economic issues.
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