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2026-07-15 17:44:12
[Germany's Ultra-Long Bond Auction Meets with Cool Demand, Yields Climb to 3.65%, Bid Multiples Rebound but Cannot Mask Weak Demand] ⑴ The German Federal Financial Services Agency (FFS) auctioned €759 million of 0% coupon federal bonds maturing in 2052 on Wednesday, with a settlement date of July 17. ⑵ The bid multiple for this auction was 2.4 times, a slight increase from 1.6 times in the previous auction on April 15, indicating a slight improvement in subscription enthusiasm. ⑶ However, the average yield rose from 3.57% to 3.65%, while the average price fell from 39.75 to 39.28, reflecting a more conservative pricing strategy for ultra-long-term bonds. ⑷ The maximum issuance size was €1 billion, but only €759 million was sold, with €241 million reserved, indicating that the primary market's absorption capacity remains weak. ⑸ The rise in yields coincides with the recent geopolitical conflicts pushing up energy prices and rising inflation expectations, leading investors to continue to increase their risk-compensation requirements for ultra-long-term assets. (6) Following the announcement of the results of the ultra-long-term bond auction, the yields on long-term bonds in the secondary market remained high. Going forward, attention should be paid to the overall supply pace of European bonds and the further impact of central bank policy signals on the demand side.
