Today Germany will auction 2.5% August 2046 bonds, its first 30 year auction since January. That means investors will first time get a thirty year auction after European Central Bank (ECB) started its asset purchase program and recent rout in the market. Almost € 2 billion worth of bonds are expected to be sold today.
- Last time the yield average yield was around 1.07%. As of now secondary market is showing 30 year yield is now trading at 1.145%. On May 14th Yield touched 1.44%. Since then yield has tightened significantly.
After today's auction yield might tighten further. German 10 year is trading at 0.53% compared to 0.78% on May 14th.
If investors demand lower yields at today's auction, it will then indicate that fear of inflation have faded along with recent rout in prices.
Lower yields are expected to push Euro lower against dollar, which is currently trading at 1.092.


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