Germany saw weaker demand for its two-year debt at an auction on Wednesday than what was witnessed in a sale last month, as investors remained hopeful that Eurozone leaders would find a solution to the debt crisis.
The country sold EUR 4.08 billion of zero coupon Treasury notes due 2014 against a target of EUR 5 billion, the Bundesbank said. The bids totaled EUR 6.238 billion. The sale of a similar maturity security on July 18 drew EUR 8.354 billion bids.
The yield on the two-year paper was zero in the latest auction versus the negative 0.06 percent in the July sale. The bid-to-cover ratio, which reflects demand, fell to 1.5 from 2.
Spain has seen a steep decline in borrowing costs since Monday after speculation that the European Central Bank would resume its purchase of peripheral bonds boosted investor sentiment.
Further, markets are also hopeful that a series of bilateral meetings between key Eurozone leaders taking place this week may produce some lasting solution for the sovereign debt crisis that has plagued the region.
Yesterday, Greek Prime Minister Antonis Samaras told German daily Bild that his country needs more time to implement the reforms and spending cuts requisitioned by the country's international creditors. He spoke ahead of his crucial meeting with Eurozone leaders.
by RTT Staff Writer
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