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Germany Makes History With ‘Failed’ Zero Coupon 30-Year Sale
Germany sold a 30-year bond with a zero coupon on Wednesday, making history in the process.
This was, in a way, the ultimate litmus test for haven assets in a world where yields continue to touch new, previously unthinkable lows amid a global duration grab that manifested itself in the US last week with 30-year yields falling below 2% for the first time.
Germany joined the Swiss and the Danes with totally negative curves a couple of days into August.
As far as Wednesday's landmark debt sale
“Ironically, one of the key risks to the bund rally (and thus one of the tantrum risks to keep on your radar) is a German fiscal stimulus push, ” Germany has to start spending into the economy, and stop with the surpluses already. Austerity never leads to growth. Monetary policy just makes money cheaper, and it already is as cheap as it can get…Germany is being paid to spend its money, but still doesn’t. Ridiculous situations like that can’t last long.