German government bonds are trading lower Tuesday with long-dated issues underperforming the yield curve, weighed by the heavy slew of eurozone issuance in that sector. Bunds were also pressured after Germany increased its bond and bill issuance for the third quarter of this year to a combined E71bln from E68.0bln projected in Dec. Sep Bunds opened lower on profit-taking following strong gains the previous session and then attempted to squeeze higher as markets digested late decision by Moody’s to cut ratings on 28 Spanish banks and two issuer ratings. Prices then came under pressure after the EU opened its order books for its long 15Y bond. In addition, Finland announced book open of its new 30-year benchmark bond and Austria opened its books for a dual-tranche syndicated offer – the 2019 RAGB and the 2044 RAGB – which are expected to be priced later. Also, Dutch sold E2.17bln of its 10-year benchmark 2.25% July 2022 DSL issue. Italy sold E2.991bln May 2014 CTZ and E916mln in linker bonds. Elsewhere, Spain sold E3.078bln in 3-month & 6-month T-bills at lower cover, higher yields and large tails.
EasyForexNews Research Team