Investing.com - Germany saw borrowing costs fall to a record low at an auction of 12-month government bonds on Monday, as demand for safe-haven assets was boosted amid worries that Spain will require a full bailout and fresh fears over a Greek exit from the euro zone.
Germany’s Treasury sold EUR2703 billion in 12-month government bonds at an average yield of negative 0.054% earlier in the day, the lowest yield on record and down from 0.019% at a similar auction last month.
It was the first type the country sold debt at negative yields at this type of auction.
Bids exceeded supply 2.3 times, compared to a “bid-to-cover” ratio of 2.8 in June.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
Following the auction, the euro remained lower against the U.S. dollar, with EUR/USD shedding 0.4% to trade at 1.2107.
Meanwhile, European stock markets were sharply lower. The EURO STOXX 50 tumbled 2.15%, France’s CAC 40 plunged 1.9%, Germany's DAX sank 1.55%, while London’s FTSE 100 fell 1.65%.
Germany’s Treasury sold EUR2703 billion in 12-month government bonds at an average yield of negative 0.054% earlier in the day, the lowest yield on record and down from 0.019% at a similar auction last month.
It was the first type the country sold debt at negative yields at this type of auction.
Bids exceeded supply 2.3 times, compared to a “bid-to-cover” ratio of 2.8 in June.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
Following the auction, the euro remained lower against the U.S. dollar, with EUR/USD shedding 0.4% to trade at 1.2107.
Meanwhile, European stock markets were sharply lower. The EURO STOXX 50 tumbled 2.15%, France’s CAC 40 plunged 1.9%, Germany's DAX sank 1.55%, while London’s FTSE 100 fell 1.65%.