FRANKFURT (DEUTSCHE-BOERSE AG) - Analysts currently consider it unlikely that the US Federal Reserve, with its rate cut expected in 2026, will also set the direction for long-term yields. The ABO Energy bond has once again suffered a sharp price drop.
January 16, 2026. FRANKFURT (Deutsche Börse). Ten-year German Bunds were trading at 2.83 percent at midday on Friday, almost unchanged from the previous week. It's a similar picture overseas, where ten-year US Treasuries are currently yielding 4.17 percent. This week, 30-year US Treasuries briefly fell below the 4.80 percent mark, dropping under their 200-day moving average. Ilona Korsch of Hauck Aufhäuser Lampe describes this level as an "important technical area."
The same applies domestically for the threshold of just over 3.40 percent, to which the yield on 30-year German Bunds has recently fallen. A previous high from last summer currently serves as chart-technical support. "If this level is sustainably breached, yields could continue down towards 3.20 percent," Korsch points out, warning of the possible risk of further short-term declines in yields. Analysts at LBBW, however, forecast a contrary trend at least in the medium term. By the end of the year, the strategists expect higher yield levels.
US Yields Expected to Rise Further
This also applies to the US market. The yield target for ten-year US Treasuries is set at 4.50 percent, also well above current levels. This is despite LBBW analysts expecting the US Federal Reserve, under the leadership of Jerome Powell's successor, to decide on its next rate cut in June. "The risk of another price drop for long-dated US Treasuries remains considerable despite Fed easing," explains Elmar Völker. Although he believes the downward trend in yields remains intact, if the low inflation figures turn out to be just "outliers," this trend could be at risk.
"Trump's repeated attacks on the Fed increase the inflation risk premium," the analyst warns in this context. In addition, the recently enacted US tax law is fueling concerns over runaway national debt. The yield curve steepness, which has risen to a three-year high, gained "fresh momentum" at the end of 2025. The spread between ten- and two-year bond yields is now at around 70 basis points, its highest level since January 2022.
The Yield Curve Could Steepen Further
Arif Husain of T. Rowe Price also expects "upward pressure on yields," as almost all governments, and many companies in the AI sector, are taking on new debt. In his view, the yield premium of ten-year US Treasuries over money market rates could rise from the current 30 basis points to about 150 to 200 basis points. He therefore advises investors: "Don't confuse the development of short-term rates with the direction of long-term yields."
This thesis is also supported by experienced fund manager Dr. Jens Ehrhardt: "In this cycle, it is striking that central bank rate cuts do not automatically mean falling long-term yields. If government debt remains high, term premiums rise, and issuance volumes are large, the ten-year yield can remain high despite falling policy rates, as has recently been observed."
Heidelberg Materials Receives Fresh Capital
In the corporate bond segment, Gregor Daniel of Walter Ludwig Wertpapierhandelsbank reports purchases of bonds from BMW (XS3075490188), Mercedes-Benz (DE000A3LH6U5), and the Asian Development Bank (XS3074428841). He also notes strong demand for a newly issued bond from Heidelberg Materials (XS3270897575). On the other hand, the Porsche bond maturing in 2027 (XS2643320018) is being sold. The automaker again reported weak sales figures this week.
The Venezuela bond in US dollars (USP17625AE71), which had risen sharply from a low level, has fallen back from its high of 43 percent to 39 percent. "After the upward movement in the first trading week, things have calmed down again," Daniel explains, referring to declining volumes.
Another "Profit Warning" from ABO Energy
Raffaele Antacido of ICF Bank reports another price crash for the ABO Energy GmbH & Co. KGaA bond maturing in 2029 (DE000A3829F5). "The bond has fallen from 50 percent to just 20 percent in two days." In mid-November, the paper was still trading at over 100 percent. After the management board had already warned of a deficit of 95 million euros for 2025 in November, the loss forecast has now been significantly increased to around 170 million euros. This did not go down well with investors, leading to a flight from both the bond and the company's stock.
By Thomas Koch, January 16, 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.)
