German government bonds are lower Tuesday amid risk-on following release of better than expected Italian and UK industrial production data. Traders also note comments from German FinMin Schaeuble who re-iterated that instruments at the disposal of EFSF/ESM can be used flexibily, but also added that ministers encouraged testing the instruments “without prior announcement”, which fuelled the risk-on, say traders. The risk-on move came despite news that Germany’s Constitutional Court will not make any final decision on the ESM today. In supply news, the Dutch State Treasury Agency (DSTA) sold E2.55bln of its 3-year benchmark 0.75% Apr 2015 DSL issue. The UK sold Stg900mln of the 0.50% Mar 2050 index-linked gilt, with a cover of 2.08 times and a real yield 0.110%. The EFSF is to price E6.0 billion of its 5-year benchmark bond Tueday at mid-swaps +50bps. Elsewhere, Greece sold E1.625bln 26-week T-bill and Slovenia sold E153.8mln in 6-month-/12-month T-bills. Attention now turns to US 3-year Note auction for $32.0bln.
EasyForexNews Research Team