Mike Lenhoff's market tactics - 23 November 2011
Germany’s Debt Agency blamed nervous markets.
Some called this morning’s 10-year bund auction ‘technically uncovered’ but others saw it as an outright failure. Of the 6 billion euro issuance the Debt Agency intended to get away, the take-up for this next benchmark bond was for 3.9 billion, that is, 65 percent of the issue.
Maybe investors simply balked at the price, feeling it was just too high. Or maybe they were rattled by the European Commission’s (EC) idea of a eurozone bond and what it may mean for the bunds already in issue. Maybe the thought of a higher yield from a eurobond issuing agency with Germany among the guarantors appealed. The EC’s proposals may not get very far if Germany has its way, but they are up for discussion, thus adding to an environment fraught with uncertainty. More >