Looming Bond Glut Sends German Demand to Record Low
- Sale of seven-year German debt draws lowest bid-to-cover
- Analysts eye heavy supply, bets ECB will unwind balance sheet
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Record-low demand for German bonds at a government auction suggests investors are getting picky as countries ready a wall of sales and speculation mounts that the European Central Bank will start reducing the bonds it’s amassed on its balance sheet over the years.
Germany sold 1.784 billion euros ($1.76 billion) of bonds due 2029 on Tuesday, with investors offering to buy 1.04 times the amount of securities sold. That was the lowest bid-to-cover ratio on record for notes with that maturity, which has been offered since mid-2020. The muted reception came after weak oversubscription rates for a 10-year debt sale, and a 30-year bond offering via banks earlier this month.