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In the first half of 2024, the bond market recorded a valued volume of EUR 9.85 billion from 63 transactions. The comparatively weak first quarter of 2024 is having a dampening effect on the market's half-year performance. Investors act selectively — not least taking into account other attractive capital market products.
For the first time since 2019, the ECB reduced the main refinancing interest rate by 0.25% to 4.25% on June 6, 2024. One or two further interest rate cuts are expected over the rest of 2024. Interest rate developments were already included in the reference interest rates before the last interest rate decision. The yield curve shows an inverse course in short and very long maturities. At the same time, we saw a slight decrease in market volatility.
Yield premiums have continued to solidify. Economic dependencies are visible in the spread. However, conservative business models sometimes allow spreads to be collected. Shortly after the ECB interest rate decision of June 6, 2024, there was a moderate jump in yields. Geopolitical effects may continue to lead to reactions on capital markets.
Outlook for the third quarter of 2024
The same activity is expected in the second half of the year. We therefore expect a total market volume of around EUR 22 billion for the bond year 2024 — slightly below the previous year's level. Conditionally, we expect the spread to move sideways if the reference interest premiums fall slightly.
