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 soldBloomberg Terminal 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.