FRANKFURT (DEUTSCHE-BOERSE AG) - Following the peaks scaled roughly two weeks ago, bond yields are retreating significantly. Traders report buying interest in high-quality, short-dated paper. Activity in the primary market remains brisk: SAP has placed four euro-denominated bonds, raising 3.5 billion euros in the process.

May 29, 2026. FRANKFURT (Deutsche Börse). The upward trend in bond yields that began three months ago appears to have run its course. Since the highs recorded on May 19, yields on ten-year government bonds in Europe and the U.S. have pulled back markedly. The yield on the ten-year U.S. Treasury fell to 4.44 percent on a weekly basis from 4.57 percent, having nearly touched 4.70 percent at its peak. The ten-year Bund yield dropped from a high of 3.20 percent to 3.06 percent last week, and now stands at 2.95 percent.

'The majority of financial market participants clearly assume that the signs of de-escalation in the Iran conflict will actually lead to a breakthrough this time,' explains Elmar Völker of LBBW. According to the analyst, 'the temporarily higher long-term yields also seem to have drawn some investors out of their reserve, as they viewed the price discount as an attractive entry signal.' In the bond market, rising yields conversely imply falling prices.

Yield decline could persist

Ilona Korsch of Hauck Aufhäuser Lampe currently describes the situation in the fixed-income markets as a 'back and forth.' However, in the event of a 'sustained downward break,' the yield on the two-year Bund (which fell from 2.63 to 2.56 percent over the week) could target the 2.50 percent mark in the next phase. For the ten-year Bund, she sees the area around 2.90 percent as the next objective.

Ralf Umlauf of Helaba attributes the retreat in yields primarily to lower energy prices. Against this backdrop, the Bund Future, a price barometer for German bonds, has climbed from a low of 123.80 points to its current level of 126.20 points. According to Umlauf, it is approaching its 'recently reached momentum high of 126.48 points.' The analyst identifies the 55-day and 21-day moving averages, currently at 125.44 and 125.26 respectively, as technical support levels.

Buying interest in short-term quality issuers

In bond trading on the Frankfurt Stock Exchange, the focus is currently on short-dated, high-quality bonds, while long maturities are being avoided due to interest rate risk. This is reported by Tim Oechsner of Steubing AG. As examples, the trader cites a Mercedes-Benz Group bond (DE000A2GSCW3) maturing in just over three years with a yield of around 3.0 percent.

Bonds from Evonik Industries (DE000A4DFCB7) and again Mercedes-Benz Group (DE000A2YNZX6), both maturing in early 2030, are at similar levels and are also seeing healthy demand. A Deutsche Telekom bond (XS3244707272) mentioned by Gregor Daniel, a fixed-income trader at Walter Ludwig Wertpapierhandelsbank, also fits this profile.

Raffaele Antacido of ICF Bank similarly reports purchases of bonds from Linde (XS3370296801) and Deutsche Lufthansa (XS2815984732), which offer slightly higher yields for similar maturities. Conversely, the trader notes selling pressure in a Goldman Sachs bond (XS2107332640) maturing in 2030.

Primary market remains flooded with new issues

The brisk pace of issuance remains a notable feature. Citing data compiled by Bloomberg, Ilona Korsch reports that issuance volume in the European market for publicly syndicated debt reached its highest level since January in May. This week, software giant SAP was particularly active. Amid very strong demand, the company placed four bonds with maturities of two, three, five, and seven years, raising a total of 3.5 billion euros.

By Thomas Koch, May 29, 2026, © Deutsche Börse AG

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