Bonds: Persistent Sell-Off Sentiment

With no signs of easing tensions in the Middle East, concerns about inflation, and ever-rising spreads for high-risk countries like France, nervousness in the bond markets is extremely high. Yields are, in some cases, at their highest levels since 2008 or even 1998.October 2, 2026. FRANKFURT (Deutsche Börse). There is no sign of the bond market calming down. “The sell-off in the global government bond market is spreading,” reports LBBW analyst Martin Siegert. “It’s chaos,” comments Metzler analyst Leon Ferdinand Bost, referring to yields on French government bonds following the announcement of the budget plans. The market is already talking about a “bondpocalypse”—a massive, global sell-off in the bond market accompanied by a rapid rise in yields.The higher yields are a global phenomenon. The yield on 10-year German government bonds peaked at 3.65 percent this week; as of Friday morning, it still stands at 3.48 percent—still the highest level since 2008. In the United Kingdom, yields on 30-year bonds even reached their highest level since 1998. In the U.S., the yield on 10-year Treasury bonds remains well above the 5 percent mark, standing at 5.25 percent on Friday morning.Concerns About the U.S. and France“Behind all this lie not only concerns about inflation, but also about the sustainability of public finances,” explains Commerzbank Chief Economist Jörg Krämer. For instance, the U.S. federal government’s debt amounts to more than 100 percent of GDP. “The U.S. debt-to-GDP ratio is thus already as high as it was at the end of World War II,” he notes. France is the eurozone’s problem child. The yield spread between French government bonds and German Bunds has risen to levels last seen during the 2012 euro debt crisis. “The reasons are high public debt, political gridlock, and doubts about fiscal consolidation,” notes LBBW analyst Siegert.Given current inflation trends, the market is currently pricing in three more interest rate hikes for both the eurozone and the U.S. As for the U.S., all eyes are on today’s U.S. jobs report, due at 2:30 p.m. our time—in the hope of signals regarding the state of the U.S. economy and, consequently, possible further interest rate hikes.Alternative Polish Government BondsJust how extreme this movement is can be seen in the U.S. government bond maturing in 2031, which is actively traded at Steubing AG, as reported by Tim Oechsner. It was issued in 2021 with a coupon of 1.25 percent; at the current price, the yield is just under 5 percent ( ). According to Gregor Daniel of Walter Ludwig Wertpapierhandelsbank, Polish government bonds denominated in zloty are popular, specifically those maturing in 2034 with a current yield of 5.88 percent ( ).Gregor DanielCorporate Bonds: “Buyers Clearly Outnumber Sellers”Prices for corporate bonds have also fallen significantly in some cases. “Buyers clearly outnumber sellers,” Daniel notes. However, he cannot identify a clear trend: “It’s all over the place.” He reports buying BMW bonds maturing in 2031 with a current yield of 4.08 percent ( ) as well as DHL bonds maturing in 2032 with a yield of 3.85 percent ( ). Also in demand: the TenneT bond issued in July, maturing in 2046 with a current yield of 5.04 percent ( ). Foreign currencies also remained in demand, including the zloty, Turkish lira, Australian dollar, and U.S. dollar. One example: the U.S. dollar-denominated Amazon bond maturing in 2046, which currently yields 6.53 percent ( ).Steubing dealer Oechsner anticipates strong sales for bonds issued by DHL ( ), Deutsche Telekom ( ), Hochtief ( ), and EnBW ( ). Also seeing strong trading volume: euro-denominated bonds from Nestlé ( ) and Toyota ( ).Few New Issuances – “Market Conditions Difficult to Assess”The new issue market is currently quiet. “Many issuers are holding back from entering the primary market because market conditions are difficult to assess at the moment,” reports Oechsner. Those who absolutely must go to market right now need a correspondingly attractive issue premium. “On the other hand, those who don’t have an immediate need for financing can certainly wait and see.”By Anna-Maria Borse, October 2, 2026, © Deutsche Börse AG About the Author Anna-Maria Borse is a financial and business editor specializing in financial markets/stock exchanges and macroeconomic topics.Feedback and questions: live@deutsche-boerse.com

Bonds: Persistent Sell-Off Sentiment

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