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Market Pulse: Germany's historic 2-yr negative yield auction

Wednesday, July 18, 2012 - 04:21

July 18 - Germany sells 2-yr bonds at auction, with lenders paying Berlin for the privilege. Finland joins the negative yield club, and the polarisation of the euro zone bond market continues.

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And historic day on the eurozone bond markets the first. Bundled in a negative yields. Germany and bottles over four billion euros of -- funds to yield might this not going to -- 6%. I'm joined -- -- Smith economist. I cop and London dawn the historic day hasn't said they but the really staggering thing. From the enemy was that the bond was up from the previous -- -- I think we're a little bit astonished by got a couple is so I think times. For the auction. A -- and surprisingly high given given that these the negative yields the coast and -- highlights just the strength of them on both a kill you -- sudden death at the moment. Under you're seeing that across other countries as well on the number -- other countries' bonds and also I'm paying negative yields. Yes -- -- have cross is on the edge. Policy Austria. Lot of people talk about Netherlands as well -- that are six countries now it. Negative yields being known around. The -- aside I think -- -- pretty much on the extent possible since coming through tomorrow. But is being missile might -- dropping new levels of the very -- -- the cut in Coolio resign. And it just highlights the and it's I guess ultimately investor nervousness about what I know and -- -- it. The outlook for the Euro itself. It's just flight ready to quality. So the model was a quick stall when the primary market certainly from Germany today what's it like on the second DiMarco I'll be seeing these new lure -- and yields on decent volume on -- but it spit out today. But the critics -- levels. Font quite blunt trading levels the -- -- look pretty much every US. Including contract this morning very low levels of activity going on through those contracts. So -- it's not doing an open office secondary market trading activity which is generally very weak across a whole range of massive losses in fixed income in the -- side. Slots. Did pretty good business spent. Across fixed income. Instruments government bones activity really is quite -- at the moment. -- -- almost say there's a clear pull my position of the eurozone bond market. I'm much more openness elastic band he stretched. I think it has. That's ago. You know if you look at the it spreads so quickly in Spain against cool eurozone now. They really are approaching that I mean -- plays very close missile timeline to get stuck cool you're -- -- AAA. -- government that. You know that that this doesn't seem to be anything in the immediate future content things around when they begin to put us typically fairly quiet. Period of -- at the end of the trading activity and the markets honorable and pianist. This time -- this strong emphasis -- direction or the other. Then it could be potentially move the market quite a long life so in. You know it's gonna be really interesting sum up. So you think France is next -- -- the negative you quote. Yeah we're on the edge at the moment I mean news you need to stop cities dec fourteenth we've got. Pretty much negative yields then. To -- is barely in positive territory. But given the trend in these cool cool rights. In I think very likely you'll see that maybe today it's their fears though we -- I have to to mention seeing evidence. Of a push outs we yield missing at a particularly in some of the the repo markets to recover. You know he'll feel levels and Julio aside the solo now. That was being put a lot of invested them on the repo markets in particular with some of the high yielding peripherals that which is fighting this thing so it. The united -- of the fact that these very low it and sub zero yield levels and cool -- -- -- -- -- I think generally contributing to a more depressed trading environment. Now are encouraging. -- the yield quote peripheral countries. Okay John thank you very much my finds that. I caps don't Smith join us at this time each week day the market pulse a snapshot of what's moving on financial markets and why. I'm Jamie give up the some voters.

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Market Pulse: Germany's historic 2-yr negative yield auction

Wednesday, July 18, 2012 - 04:21