EUCOM Economic Analysis - Part I

[Firn]

Guaridan €-crisis live ticker

10.52am: The UK has sold €2bn of 30-year gilts at lower borrowing costs, showing that the eurozone crisis has not dampened demand for British debt.

The yield on the sale dropped to 3.224% (from 3.341%). That has sent gilts rallying in the general bond market, with prices hitting record high levels.

10.29am: Germany has succeeded in selling new five year bonds at a record low interest rate, but didn't manage to sell as much as hoped.

The Bundesbank sold €4bn of bonds maturing in April 2017 at a yield of just 0.56%, down from 0.8% at the last auction of five-year debt. Such a low cost of borrowing shows that buyers were prioritising safety over rate of return.

P.S: The capital flight from Greece in those last two years looks really bad. Greece clearly needs foreign capital badly but who wants to lend if he hardly can hope to get it back? Only the IMF and the EU can step in but is the political will still there to overcome the internal and external hurdles?

Austrian T-bond yields at an all-time low

Bei der Aufstockung einer fünfjährigen Anleihe im Ausmaß von 600 Mio. Euro lag die Rendite bei 1,408 Prozent. Bei der Aufstockung einer zehnjährigen Emission in Höhe von 500 Mio. Euro waren es 2,634 Prozent. „Beide Zinssätze sind Alltime-Lows“, sagte Martha Oberndorfer, Geschäftsführerin der Bundesfinanzierungsagentur (ÖBFA) am Dienstag.

Inländische Banken kamen diesmal nicht zum Zug. Beide Aufstockungen gingen zu 100 Prozent an ausländische Banken. Das sei sehr selten, so Oberndorfer. Ausschlaggebend für die Zuteilung sei allein die Höhe der Gebote. „Der Emittent steuert das nicht.“

Despite having lost the AAA rating from the American rating club 100% of the debt was picked up for a yield of just 1.4% by foreign banks....

The paths of the European T-bond yields has first almost united due to the Euro but since a couple of years they truly spread out