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Germany’s bonds underperform as it sells 10-yr securities

Bloomberg

Germany’s government bonds underperformed their higher-yielding euro-area peers as the nation sold 4 billion euros ($4.4 billion) of 10-year debt.
Italy’s sovereign bonds advanced, along with most major euro-region securities, while German 10-year bunds were little changed.
The yield on Europe’s benchmark securities has climbed about seven basis points since the day before the European Central Bank’s policy decision on March 10, when President Mario Draghi announced an expansion of stimulus and signaled that there will be no further interest rate cuts.
“Bund yields have notched up since the ECB meeting as rate-cut expectations were priced out,” Benjamin Schroeder, a Frankfurt-based interest-rate strategist at Commerzbank AG, which is ranked first among dealers by Germany’s debt agency, wrote in an e-mailed note. “We consider the risk of a further back-up in bund yields remote.”
Germany’s 10-year bund yielded 0.31 percent as of 10:39 a.m. London time. The price of the 0.5 percent security due in February 2026 was 101.90 percent of face value.
Italy’s 10-year bond yield fell three basis points, or 0.03 percentage point, to 1.34 percent, while that on similar-maturity Spanish debt slid two basis points to 1.49 percent.
Germany allotted the 10-year bunds at an average yield of 0.3 percent.
That compares with 0.26 percent at a previous auction on Feb. 17, which was the lowest since April 2015.

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