LONDON: Euro zone government bond yields fell on Thursday after a busier than expected week of issuance, with investors relieved that only one sale -- a small debt auction in Ireland -- remains to digest before the weekend.
The Netherlands, France, Germany and Italy have sold ultra-long bonds, putting upward pressure on long-dated yields and pushing up 10-year yields as well as some investors switched into longer maturities for higher returns.
Dublin sells 750 million euros of 10-year debt, an amount that is easy to absorb from a country that does not issue as frequently as its regional peers.
"The auction should go well given both the choice of bond and the relatively small size," Commerzbank rate strategist David Schnautz said, adding that the now reduced supply pressure in the euro zone should see German Bund yields falling.
Irish 10-year bond yields were down 2 basis points at 0.84 percent, while Bund yields fell 1 basis point to 0.13 percent. Other yields in the single currency bloc were 1-3 basis points lower.
Bund yields are 6 basis points below this week's highs hit as France surprised markets with a syndicated sale of 20- and 50-year bonds.
Ireland, the euro zone's top performer on economic growth, is already fully funded for the rest of the year and since January has raised 4 billion euros out of a guided range of 6-10 billion euros of debt to finance the state into 2017.
Having been forced to seek a bailout at the height of the debt crisis, Dublin raised 100 million euros via its first 100-year bond two weeks ago, with slow and unpredictable talks in forming a government not denting investor appetite.
The 2.35 percent yield on its century bond was a touch more than it paid to borrow over three months in 2012 on its return to the market after a two-year hiatus.
It will hold another bond auction on May 12.
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