{"id":265327,"date":"2025-10-13T11:42:10","date_gmt":"2025-10-13T11:42:10","guid":{"rendered":"https:\/\/www.quoniam.com\/?p=265327"},"modified":"2025-10-13T11:43:38","modified_gmt":"2025-10-13T11:43:38","slug":"bonds-uncertain-times","status":"publish","type":"post","link":"https:\/\/www.quoniam.com\/en\/article\/bonds-uncertain-times\/","title":{"rendered":"Market commentary bonds: Corporate bonds as an anchor of stability in uncertain times"},"content":{"rendered":"\n
\n

The third quarter of 2025 was marked by geopolitical tensions, protectionist measures in the US and growing fiscal challenges in Europe \u2013 developments that also had a significant impact on the bond markets.<\/p>\n\n\n\n

Growing fronts in global economic policy<\/strong><\/p>\n\n\n\n

The US government is increasingly ruthlessly pursuing its global interests. High tariffs and six-figure visa fees are intended to break India out of Eurasian integration. Secondary sanctions against countries that buy Russian oil and gas are intended to improve the sales prospects for American energy commodities. In addition, the US expects Europe and the Gulf states to make significant investments in the US economy.<\/p>\n\n\n\n

Many of the countries affected are resisting these measures. India, for example, cancelled a major order from the US, concluded new economic projects with Russia, initiated a diplomatic thaw with China and took part in the latest Russian military exercises. The world is heading towards a division into two parts: One part uses the political, economic and financial resources and systems of the West, while the other part, led by China and Russia, is increasingly establishing alternative systems \u2013 from settlement mechanisms to clearing houses.<\/p>\n\n\n\n

Europe’s strategic weakness and economic consequences<\/h5>\n\n\n\n

Europe is in danger of becoming the big loser in this development. Unable to formulate and represent its own interests, the EU follows the US even when this course runs counter to Europe’s own interests (energy policy) or hinders future growth potential (Middle East, China). The loss of affordable energy has led to the loss of 50,000 industrial jobs in Germany alone in 2024 \u2013 and the trend is rising (source: Statistisches Bundesamt).<\/p>\n\n\n\n

The US is also proving to be an unreliable partner: While US President Trump is demanding massive spending by European NATO countries on US military equipment, the tariff negotiations between the EU Commission and the US government ended in a debacle for Europe. The US will receive duty-free access to the European market, while European companies will have to pay import duties of 15%. It is therefore hardly surprising that many European companies are now planning to increase their investments in the US.<\/p>\n\n\n\n

Fiscal risks and rising long-term interest rates<\/h5>\n\n\n\n

Stagnating economic growth and massive fiscal spending, including a questionable militarisation strategy, are weighing on European public finances. The German military programme will make balanced budgets unlikely for years to come. Austria has been given a “negative outlook” by Moody’s. Spreads on French government bonds are rising again, and the British press is already drawing parallels with the IMF bailout in the 1970s.<\/p>\n\n\n\n

The combination of weak growth potential, rising government spending and a lack of competitiveness amid high energy prices is leading to rising debt, persistent inflation and higher long-term interest rates.<\/p>\n<\/div><\/div>\n\n\n\n

\n
Figure 1: Index of 30-year yields in selected countries<\/h5>\n\n\n\n
\"\"
Source: Bloomberg L.P.<\/figcaption><\/figure>\n<\/div><\/div>\n\n\n\n
\n

Since interest rates peaked just under two years ago, 30-year US yields have fallen by 36 basis points, while yields in selected European countries are higher and have risen as follows:<\/p>\n\n\n\n