Deutsche Bank distances itself from analyst who predicts dump of US assets

Deutsche Bank has publicly distanced itself from an internal analyst report that suggested European investors could sell U.S. government bonds and other assets.

According to US Treasury Secretary Scott Bessent, CEO Christian Sewing personally called to distance himself from the analysis.

Deutsche Bank top distances itself from report

The analysis came from George Saravelos, head of currency research at Deutsche Bank. In a note, he stated that European countries may be less willing to hold US assets, partly due to geopolitical tensions such as recent statements by Donald Trump on Europe and Greenland.

Saravelos argued that this could lead to a realignment of dollar holdings, which would limit the damage to the euro. He pointed, among other things, to Danish pension funds that are reducing their exposure to the dollar.

According to Bessent, Christian Sewing informed by telephone that Deutsche Bank does not support Saravelos’ report. “The idea that Europeans are selling US assets comes from a single analyst. The CEO called to say that is not the bank’s position,” Bessent said at the World Economic Forum in Davos.

A spokesperson for the bank would not confirm the conversation, but emphasized that the research team works independently and that individual analyzes do not necessarily represent management’s view.

Market drops after publication

The financial markets reacted violently. US stocks fell more than two percent, the dollar lost ground against major currencies and the yield on thirty-year government bonds rose to almost five percent.

Europe is the largest holder of US assets in the world, with more than $8 trillion in bonds and stocks. According to Saravelos, recent geopolitical developments could lead to these positions being wound down.

Danish pension manager AkademikerPension reported on Tuesday that it would sell its US government bonds completely before the end of the month. The fund manages approximately $25 billion and calls US policy too risky to continue investing in Treasuries.

Analysts more often a source of diplomatic tension

It is not the first time that an analyst’s report has led to political discomfort. In 2021, CEO Sewing already apologized for an earlier critical report that caused unrest at the German Ministry of Finance. UBS and Santander also previously had to make public apologies after controversial statements by economists.

Saravelos is known for his daring analyses. For example, he previously predicted a decline in the dollar, warned of political pressure on the US central bank and called US fiscal policy unsustainable.