Bund futures reverse gains after German debt sale
LONDON, Sept 4
LONDON, Sept 4 (Reuters) - German Bund futures reversed gains on Wednesday after a five-year debt auction saw higher yields and weaker demand than a previous one.
Bund futures were last 3 ticks lower on the day at 139.58, having traded as high as 139.87 earlier.
Germany sold 4.039 billion euros of its new 1.00 percent, 5-year Bobl notes at an average yield of 1.00 percent, versus 0.64 percent at a previous auction. The bid/cover ratio, a measure of investor demand, fell to 1.5 from 1.6.
"One of the drivers behind this is likely to be market confusion over the opposing factors of QE (quantitative easing) tapering (by the Federal Reserve) ... and potential military action in Syria," Rabobank rate strategist Lyn Graham-Taylor said.
"The weak bid/cover indicates that the QE effect is currently predominating in the bigger picture."
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