* German 2044 bond auction receives strong bids
* French debt sales hit upper end of target range
By William James
LONDON, Oct 31 Investors snapped up long-term
debt issues from Germany and France on Wednesday, drawn by
attractive yields relative to bonds with shorter maturities.
Germany's final sale this year of its 2044 bond raised 1.704
billion euros and attracted bids worth 2.7 times the amount sold
to investors -- well above the average of similar sales this
"It was actually very strong. We were a bit surprised by how
strong it came out," said Artis Frankovics, strategist at Nomura
The bonds were sold at an average yield of 2.34 percent,
higher than the 2.17 percent seen at a similar sale in July but
still low by historical standards.
Analysts said the recent poor performance of long-dated
German debt, in part due to the risk that monetary policy could
stoke inflation, had left the July 2044 paper looking good value
compared to 10-year debt.
"We see inflation risk is coming down so that could have
driven some more support for the 30-year bonds... although
demand today is probably more due to valuation considerations,"
said ING strategist Alessandro Giansanti.
Earlier, France found similarly high demand for its
long-term debt, issuing 7.49 billion euros of new bonds and
hitting the maximum the Treasury had targeted from the sale of
six-, 10- and 23-year lines.
French debt has remained popular with investors thanks to its
combination of higher yields than Germany and France's status as
a "core" euro zone state despite signs the government is
reluctant to embark on rapid economic reform.