BNP Paribas strategists highlight that Europe is increasingly being viewed as an alternative safe haven, with the Euro gaining traction as a global safe asset. According to the strategists, the European Central Bank's (ECB) recent work points to stronger demand for Euro-denominated assets and a notable increase in the convenience yield on German bunds, which has tripled from 30 basis points to 90 basis points over the period from 2023 to 2025 [1].
The ECB’s annual report on The International Role of the Euro indicates that the Euro is catching up as the world’s safe asset of choice, with the currency behaving more like a safe asset than the US dollar during recent episodes of market turmoil [1]. This shift has been noticed by financial markets, as reflected in the rising convenience yield on German bunds, which supports broader Eurozone financing conditions [1].
BNP Paribas also emphasizes Europe’s industrial resilience, strength in services, technological momentum, and an improving policy and geopolitical backdrop as structural factors boosting the Euro’s safe-haven appeal [1]. The strategists note that all Euro-denominated bonds, both sovereign and private, are priced off German bunds, meaning the benefits extend to the entire Eurozone economy [1].
CONCLUSION
BNP Paribas sees the Euro's safe-haven status strengthening, supported by rising demand for German bunds and favorable structural trends in Europe. The ECB’s findings and market reactions suggest the Eurozone is becoming more attractive for global investors seeking stability.