Taiwan: Amidst US Debt Sell-Off, Where Are Investors Seeking Safe Havens?

Turbulence in US Bonds Sends Investors Flocking to German Debt, But what's the bigger picture?

The US bond market is experiencing significant selling pressure this week. Investors are increasingly turning to German government bonds as a safe haven, resulting in the worst relative performance of US bonds compared to German bonds since 1989. While the German 10-year yield remained relatively stable, US bond yields have jumped significantly, highlighting how Trump's tariff policies have undermined confidence in the safety of US debt.

Trump's frequent economic disturbances have led US bonds to behave like risky assets, prompting investors to shift towards German debt. Germany, the world's largest sovereign bond market outside of the US, is currently favored by investors, despite experiencing a recent yield shock itself a month prior.