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2026-05-27 17:34:41
[German Bond Auction Shows Dramatic Contrast: 30-Year Demand Surges to 1.8, 15-Year Demand Halved] ⑴ The German central bank auctioned €787 million of newly issued 2.90% coupon 30-year bonds on Wednesday, with an average yield of 3.50%, a significant drop from the previous auction's 3.62%. The bid coverage ratio was 1.8, a substantial increase from the previous 1.3, indicating strong demand for long-term bonds. ⑵ On the same day, €763 million of 2.60% coupon 15-year bonds were auctioned, with an average yield of 3.30%, slightly lower than the previous 3.34%. However, the bid coverage ratio plummeted from 2.7 to 1.5, almost halved, indicating significantly weak demand for medium-term bonds. ⑶ The two auctions presented starkly different demand patterns: 30-year bonds saw higher coverage despite lower yields, while 15-year bonds, although yields also declined, experienced a significant drop in bidding enthusiasm. This divergence is reflected at the long end of the yield curve, where investors are more inclined to lock in higher absolute returns through ultra-long-term instruments.
