bonds germany

“Short Of A Lifetime” Back On?

"I'm not entirely sure how sustainable this is."

Two weeks ago in "Time To Revisit That 'Short Of A Lifetime?'" I flagged the glaring discrepancy between German inflation (which is on the rise) and German bond yields (which are still depressed). "I'm not entirely sure how sustainable this is," I wrote, referencing the following chart: Well, here's what German bonds have done since then: Not too bad of a call, I'd say. Indeed on Wednesday, yields spiked to their highest levels in a year. "In outright terms, 30y bund yields have sold off 27bp YTD moving from just over 86bp to 1.13%, leaving them trading just 8bp from the highs reached in early December," Barclays wrote on Tuesday, before today's 30Y sale. As it turns out, demand at Wednesday's auction was tepid.  Germany Sells EU0.811Bn vs EU1Bn target Total bids 1.11bn Average yield 1.2% vs 0.64% at Oct. 19 auction Bid-to-cover 1.4 vs 1.7 at Oct. 19 auction Real bid-to-cover 1.1 vs 1.4 at prior auction Percentage retained 18.9% vs 14.9% at prior auction Well, sure enough, Kyle Bass was out talking about this very same trade today on Bloomberg TV. Here's what he had to say: Real rates in Germany are at the lowest level ever right now. Inflation in Germany is s
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