Wednesday, November 23, 2011

Germany: Investors on strike as many German bonds receive no bids at auction.

  35 per cent of German 10 year bonds up for auction today failed to get bids. A securities analyst called the results nothing short of a disaster.The same analyst noted that if Germany, the strongest of  European countries in financial terms, has problems marketing its bonds the situation will be much worse for weaker nations.
   The results have been a factor in raising the cost of borrowing in Europe and causing the Euro to decline.
Yields climbed on bond yields for many countries including Greece, Belgium, and France. The German auction had the highest proportion of unsold ten year bonds since 1995.
     Neil Jones head of a European hedge fund said:“If investors do not wish to buy bunds (German bonds), they do not wish to buy Europe,”  Belgium is due to auction 10 year debt on Nov. 28. France and Italy are also due to sell bonds next week. The debt crisis in Europe seems to be continuing in spite of new governments in Spain, Italy, and Greece. For much more detail see this Bloomberg article.

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