Germany sells EUR 2.503bln vs exp. EUR 3.0bln 1.25% 2048, 0.00% 2052 and 2.90% 2056 Bund

Germany's recent bond auction saw a lower-than-expected sale of EUR 2.503 billion compared to the EUR 3 billion target, signaling weaker demand.

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Germany sells EUR 2.503bln vs exp. EUR 3.0bln 1.25% 2048, 0.00% 2052 and 2.90% 2056 Bund

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  • 1.25% 2048: b/c 1.7x (prev. 1.8x), average yield 3.55% (prev. 3.25%), retention -- (prev. 21.4%)
  • 0.00% 2052: b/c 1.6x (prev. 1.6x), average yield 3.57% (prev. 3.42%), retention 53.7% (prev. 14.0%)
  • 2.90% 2056: b/c 1.45x (prev. 1.7x), average yield 3.58% (prev. 3.45%), retention 22.1% (prev. 24.3%)
Context

The average yields across the different maturities were higher than in previous auctions, which may reflect rising borrowing costs and a shift in investor sentiment. Given the retention rates, particularly in the 0.00% 2052 bond, it suggests some apprehension among investors about future rate movements and inflation implications.

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