In public, the talks revolve around rampant inflation and higher lending rates.

Yes, it is correct: since the beginning of the year there has been a turnaround in interest rates, which has brought us out of the valley of negative interest rates.

But in the past few weeks, when concerns about the economy have triggered a wave of sell-offs on the stock market, a flight to Bunds can be observed again.

The price gains temporarily pushed down the yield on the ten-year federal bond, which was already close to 2 percent in mid-June, to 1.203 percent.

Markus Fruehauf

Editor in Business.

  • Follow I follow

On Wednesday there was the auction of the new ten-year federal bond.

It still carries an interest coupon of 1.7 percent and is well above the current market interest rate.

With an issue price of 104.5 percent, the average return was 1.22 percent.

The offer of five billion euros was met with a demand of 4.358 billion euros.

An auction is said to be short when the demand is less than the supply.

In the past few weeks, the yield advantage of American government bonds has increased again to 1.7 percentage points.

However, at the end of April it was significantly higher at a good two percentage points.

On the foreign exchange market, the interest rate advantage of American government bonds was cited as a reason for the falling euro exchange rate.

It may be that he provided the final impetus for the common currency's 20-year low.

But the interest rate differential is not the main reason for the euro's low rate of $1.0213.

These are the recession worries in Europe, which have been intensified by the feared bottlenecks in the gas supply.

At the same time, growing fears of an economic downturn are dampening market expectations for interest rate hikes by the European Central Bank (ECB) this year.

Investors are now expecting only 1.4 percentage points by the end of the year after 1.9 percentage points previously.

Keywords: