Germany’s government bonds snapped a decline from yesterday after a government report showed the nation’s jobless total increased for a ninth month in December.
Benchmark yields fell from a two-week high as the data added to signs Europe’s largest economy is struggling to recover, underpinning demand for the region’s safest assets.
Germany’s economy may have contracted in the fourth quarter after the euro area succumbed to recession, the Bundesbank said on Dec. 17.
France sold 8 billion euros ($10.5 billion) of bonds maturing between 2019 and 2032, with 10-year securities auctioned at a record-low average yield.
“We still have a lot of concerns about growth in the euro- region and that’s extending to core countries,” said Alessandro Giansanti, a senior fixed-income strategist at ING Groep NV in Amsterdam.
“We need to see better data to confirm the expectations of a recovery so German yields will stay low. We don’t expect 10-year yields to break above 1.60 percent.”
The German 10-year yield was little changed at 1.43 percent at 1:04 p.m. London time after rising to 1.45 percent, the highest level since Dec. 19.
The 1.5 percent bond maturing in September 2022 traded at 100.59. The number of Germans out of work rose a seasonally adjusted 3,000 to 2.942 million, the Federal Labor Agency said. The adjusted jobless rate was unchanged at 6.9 percent.
Bunds slid yesterday, with 10-year yields climbing the most since Sept. 14, as investors shunned safer assets after U.S. lawmakers passed a bill averting spending cuts and tax increases that threatened recovery in the world’s largest economy.
‘Too Soon’
“It is too soon to bet on further major losses” for bunds, Ulrich Wortberg, a strategist at Helaba Landesbank Hessen-Thueringen in Frankfurt, wrote in a note to clients.
“Instead, we see potential for a stabilization trend after yesterday’s losses, especially as the fundamental data are unlikely to provide any major negative stimulus.”
The German 10-year bund futures contract expiring in March was little changed at 144.02, after dropping 1.1 percent yesterday.
The contract is likely to stay in a range between 143.48 and 144.90, Wortberg predicted.
Italian two-year yields fell four basis points, or 0.04 percentage point, to 1.71 percent, the lowest level since March.
France sold 3.53 billion euros of bonds maturing in October 2022 at a record-low average yield of 2.07 percent, compared with 2.22 percent at the previous auction of the securities on Oct. 31.
The nation also sold debt due in October 2019, April 2020 and October 2032. French 10-year yields rose two basis points to 2.10 percent.
Volatility on Belgian debt was the highest among euro-area nations tracked by Bloomberg, followed by those of Portugal and Italy, according to measures of 10-year bonds, two- and 10-year yield spreads and credit-default swaps.
German bunds returned 4.1 percent over the past year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies.
Italian debt rose 21 percent while Spain’s gained 7.7 percent.
bloomberg.com
Benchmark yields fell from a two-week high as the data added to signs Europe’s largest economy is struggling to recover, underpinning demand for the region’s safest assets.
Germany’s economy may have contracted in the fourth quarter after the euro area succumbed to recession, the Bundesbank said on Dec. 17.
France sold 8 billion euros ($10.5 billion) of bonds maturing between 2019 and 2032, with 10-year securities auctioned at a record-low average yield.
“We still have a lot of concerns about growth in the euro- region and that’s extending to core countries,” said Alessandro Giansanti, a senior fixed-income strategist at ING Groep NV in Amsterdam.
“We need to see better data to confirm the expectations of a recovery so German yields will stay low. We don’t expect 10-year yields to break above 1.60 percent.”
The German 10-year yield was little changed at 1.43 percent at 1:04 p.m. London time after rising to 1.45 percent, the highest level since Dec. 19.
The 1.5 percent bond maturing in September 2022 traded at 100.59. The number of Germans out of work rose a seasonally adjusted 3,000 to 2.942 million, the Federal Labor Agency said. The adjusted jobless rate was unchanged at 6.9 percent.
Bunds slid yesterday, with 10-year yields climbing the most since Sept. 14, as investors shunned safer assets after U.S. lawmakers passed a bill averting spending cuts and tax increases that threatened recovery in the world’s largest economy.
‘Too Soon’
“It is too soon to bet on further major losses” for bunds, Ulrich Wortberg, a strategist at Helaba Landesbank Hessen-Thueringen in Frankfurt, wrote in a note to clients.
“Instead, we see potential for a stabilization trend after yesterday’s losses, especially as the fundamental data are unlikely to provide any major negative stimulus.”
The German 10-year bund futures contract expiring in March was little changed at 144.02, after dropping 1.1 percent yesterday.
The contract is likely to stay in a range between 143.48 and 144.90, Wortberg predicted.
Italian two-year yields fell four basis points, or 0.04 percentage point, to 1.71 percent, the lowest level since March.
France sold 3.53 billion euros of bonds maturing in October 2022 at a record-low average yield of 2.07 percent, compared with 2.22 percent at the previous auction of the securities on Oct. 31.
The nation also sold debt due in October 2019, April 2020 and October 2032. French 10-year yields rose two basis points to 2.10 percent.
Volatility on Belgian debt was the highest among euro-area nations tracked by Bloomberg, followed by those of Portugal and Italy, according to measures of 10-year bonds, two- and 10-year yield spreads and credit-default swaps.
German bunds returned 4.1 percent over the past year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies.
Italian debt rose 21 percent while Spain’s gained 7.7 percent.
bloomberg.com
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