German government bonds are lower Thursday but off their worst levels following Spanish bond auction results, which were seen as disappointing. Spain allotted E6.61bln total size in 4.25% 2016 Bono, 4.60% 2019 Obligacion and also the 5.85% 2022 Obligacion issues Thursday, and exceeded the target of E3.5bln to E4.5bln set by the Tesoro Publico. However, the Tesoro sold the 2016 Bono issue at a higher yield compared to the previous auction, held just last week. That helped pushed Spanish 10-year spreads wider by 6bps to +369bps. France sold E7.965bn worth of BTAN bonds and E1.498bln worth of linker bonds, almost full allocation on both. UK sold stg4.0 billion of the 4.00% Sep 2016 Gilt at yield 0.893%, cover 2.02 times and tail 0.2bps, strong results as expected. Elsewhere, Austria has opened books for its new 10-year benchmark bond and also 50-year bond. Attention now turns to comments from ECB President Draghi at 12000GMT, Q4 earning results from Bank of America and Morgan Stanley. Elsewhere, Troika press conference on 5th review for Ireland at 1400GMT.
EasyForexNews Research Team