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German bunds enjoy a rally after €4bn sale gets plenty of interest
GERMAN bunds rallied yesterday after solid demand at a German debt auction and a sell-off in periphery Eurozone bonds prompted investors to plough into debt issued by the region’s strongest member ahead of an EU summit later in the week.
The yield spread between 10-year German bonds and their Italian and Spanish counterparts expanded on speculation that European policymakers may fail to reach a lasting solution to the Eurozone debt crisis at tomorrow’s summit.
Ten-year bund yields fell around 11 basis points to 2.025 per cent, hitting their lowest since 23 November.
German bonds rallied after a €4.09bn sale of five-year notes drew bids for 2.1 times the amount on offer, compared with 1.5 at a similar sale in November.