It has come to this…
When measured by demand, Germany apparently just had one of its worst bond auctions ever. The rock of Europe is seeing less enthusiasm for its debt. Specifically, according to Nomura, total bids at the auction came to 3.9 billion EUR vs. 6 billion EUR issued.
It’s a very rare day, when markets are in risk off mode, but German bund yields are actually going higher.
Much like US Treasuries, German bund yields almost always go lower on risk off days.
This is actually something that’s been in development for a while. Morgan Stanley noted on November 17, that while peripheral yields were jumping, German bund yields had stopped falling, signifying a shift in investor behaviour: Rather than moving money around intra-Europe, money was fleeing Europe altogether.
Germany 10-Year Bond
Overall, it is a very ugly day so far across Europe, and in US futures. For a full roundup, see here.
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