- Michael Leister, a strategist at Commerzbank
Germany failed to raise 5 billion euros of debt in an auction on Wednesday, as investors were reluctant to buy bonds at a record-low yield of 1.5%. Germany sold just €3.951 billion directly to investors, pushing yields on 10-year bonds up to 1.52% from 1.42%. Demand was weak, with bids exceeding supply only 0.79 times, compared to 1.57 at the last auction.
"At face value it doesn't look like a good auction. Nominal bids fell short of the 5 billion target. So once again in technical terms it is a failed auction," said Michael Leister, a strategist at Commerzbank.
"Although, against the backdrop of the current environment and Bunds having rallied quite a bit over the past sessions, it's obviously not a good auction but also not a disaster."
The Stoxx Europe 600 Index retreated 1.83 per cent to 270.72. Germany's DAX Index fell 2.00 per cent to 7,276.51, while France's CAC 40 Index tumbled 2.82 per cent to 3,414.84.
© Dukascopy Bank SA