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Economics

German Sub-Zero Yields Under Pressure From European Bond Supply

  • France and Italy among nations auctioning securities next week
  • Bunds are trading in tightest range this month since 1991

After the quietest trading month in more than two decades kept Germany’s benchmark bond yields entrenched below zero, the return of sellers next week has the potential to disturb the market calm.

Italy is due to sell as much as 7.75 billion euros ($8.7 billion) of bonds on Aug. 30, followed two days later by a French auction of up to 9 billion euros. Together with potential sovereign sales via banks that are still to be confirmed, total supply in the region next week may reach 27 billion euros, according to Commerzbank AG. Germany, which is offering two-year notes on Aug. 31, was the sole bond issuer this week with a sale of five-year debt.