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2026-09-16 17:36:09
[Germany's 30-year and 20-year bond auctions diverge, with weaker demand for longer-term bonds] ⑴ The German central bank auctioned approximately €1.257 billion in additional 30-year bonds on Wednesday, with a coupon rate of 2.90%. ⑵ The average yield on the 30-year bonds in this auction was 3.9%, higher than the previous auction's 3.68%. ⑶ The bid-to-cover ratio for the 30-year bonds was 2.4, higher than the previous 3.6, but the average yield increased significantly. ⑷ On the same day, the German central bank auctioned approximately €864 million in additional 20-year bonds, with a coupon rate of 3.40%. ⑸ The average yield on the 20-year bonds in this auction was 3.88%, higher than the previous auction's 3.6%. ⑹ The bid-to-cover ratio for the 20-year bonds was 2.4, higher than the previous 2.3. (7) The auction size of both treasury bond issues was relatively limited, but the average yield on 30-year bonds jumped sharply, indicating relatively weak demand at the long end. (8) The bid-to-cover ratio for 20-year bonds improved while the bid-to-cover ratio for 30-year bonds declined, reflecting that investors are more cautious at the ultra-long end. Going forward, attention should be paid to the pressure of further increases in long-term yields.
