FRANKFURT (DEUTSCHE-BOERSE AG) - Typically, safe-haven Bunds are in high demand during a crisis, causing yields to fall. However, the conflict involving Iran has pushed yields upward. This is because markets now anticipate higher inflation - and a tendency toward key interest rate hikes.
March 6, 2026. FRANKFURT (Deutsche Börse). Despite the strikes by Israel and the U.S. on Iran, there is no sign of a flight to safety. "Investors clearly no longer view U.S. Treasuries and Bunds as safe havens, unlike in previous crises," notes Commerzbank analyst Christoph Balz. "The market now expects inflation to rise due to the surge in oil and gas prices, and that the ECB will be more likely to raise rates than cut them," reports bond trader Arthur Brunner from ICF Bank.
Ten-year Bunds are yielding 2.86 percent on Friday morning, up from 2.70 percent last week. U.S. Treasury yields have also risen recently, with ten-year notes now yielding 4.15 percent compared to 4 percent a week ago.
Only weak and brief consequences for inflation?
"Many market participants still consider ECB rate hikes possible this year," explains Ulrich Kater of DekaBank. However, he assumes that the impact on inflation in the eurozone will remain too small and too temporary. "As soon as the situation on the oil and natural gas markets begins to ease, the still high demand for investment will cause Bund yields to fall again."
Corporate bonds: "A clear picture is lacking"
In corporate bond trading, Gregor Daniel of Walter Ludwig Wertpapierhandelsbank reports a mix of buying and selling. "This applies to all maturities and segments. A clear picture is lacking," he explains. In any case, he does not see a flight to safety.
Buy lists include bonds from EnBW maturing in 2031 currently at 3.1 percent (XS2862984510), BMW also maturing in 2031 at 3.19 percent (XS3075490188), and Deutsche Telekom maturing in 2029 at 2.86 percent (XS3244707272).
Pressure on high-yield bonds, but only some
In the high-yield segment, Brunner reports that some papers are losing ground, such as Semper idem Underberg (DE000A30VMF2). However, the bond is still trading above 100 percent. Others remained stable, such as Katjes International (NO0012888769) and Mutares (NO0013325407, NO0012530965). "The tap of the Katjes bond from 185 to 200 million euros also had no negative impact," Brunner adds. The fruit gummy manufacturer announced this week that it is taking a stake in the Italian luxury fashion and homewear brand Missoni, known for its zigzag design, via a subsidiary.
In contrast, Noratis continued its downward trend, as Brunner further reports. The real estate developer from Eschborn near Frankfurt announced insolvency under self-administration this week. The bond maturing in 2029 with a 5.5 percent coupon (DE000A3H2TV6) fell from 18 percent recently to just 10 percent.
Alternatives to Euro and US Dollar
Interest in bonds in other currencies has continued, as Daniel reports, including Australian dollars, Brazilian reals, or Polish zlotys. Brunner also observes good demand for bonds in Australian dollars, as well as in Norwegian krones.
The new issue market remained quiet this week. "Geopolitical uncertainty is too high," Brunner notes.
By Anna-Maria Borse, March 6, 2026, © Deutsche Börse AG
(Deutsche Börse AG is solely responsible for the content of this column. The articles do not constitute an invitation to buy or sell securities or other assets.)
