BNP Paribas cites ECB findings of a threefold increase in German bund convenience yield, bolstering the euro’s safe-asset appeal.
The euro is strengthening as a global safe-haven asset, driven by rising demand for Eurozone bonds and improved financing conditions. BNP Paribas strategists highlight a threefold increase in the convenience yield on German bunds, from 30 bps to 90 over 2023-25, signaling broader market confidence in euro-denominated assets.
Recent ECB reports confirm the euro’s growing role as a preferred safe asset, particularly during market turmoil. The shift reflects Europe’s industrial resilience, services growth, and a more stable geopolitical backdrop, positioning the euro as a viable alternative to the US dollar.
Financial markets have responded by repricing euro assets, with German bunds serving as a benchmark for sovereign and private debt across the Eurozone. This dynamic supports the region’s economic outlook and reinforces the euro’s haven status.