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2026-02-20 16:13:32
[War Clouds Loom Over the Middle East, German Bonds Become a New Favorite for Safe-Haven Investment] ⑴ As tensions between the US and Iran escalate sharply, the logic behind global safe-haven asset selection is undergoing subtle changes. Analysts at ING Group point out that German government bonds may be more favored than US Treasuries, as they offer investors a safe haven from the turmoil related to Iran. ⑵ This assessment is based on the rapid escalation of geopolitical risks. Reports indicate that the US is considering initial strikes against Iran to force a nuclear agreement, while military deployments have quietly begun. The market is currently struggling to determine whether this is merely a pressure tactic to strengthen negotiating power or a prelude to a substantial conflict. ⑶ Fund flows have begun to reflect this shift in preference. US Treasury yields, which rose on Thursday, stabilized on Friday, with Tradeweb data showing the 10-year US Treasury yield at 4.073%. Meanwhile, German government bond yields fell 1.1 basis points to 2.732%, indicating that safe-haven funds are shifting towards core European government bonds. (4) The logic behind this differentiated choice lies in the fact that if a conflict breaks out, the United States, as a party involved, may face direct economic and inflationary shocks, while Germany, with its relatively isolated geographical location, can better fulfill its pure safe-haven function. As tensions escalate in the Middle East, German bonds are becoming a new choice for funds due to their pure safe-haven nature.
