BERLIN/LONDON: Germany's Federal Finance Agency said on Wednesday that the average yield fetched at a top-up auction of a 30-year Bund was the lowest on record for that debt instrument during an auction, a spokesman for the Finance Agency said.
The bid to cover ratio of the auction was 2.0 and the average yield was fixed at 0.65 pct which was the lowest recorded during an auction for that type of paper, spokesman Joerg Mueller said. A backdrop of unprecedented monetary stimulus from the European Central Bank and mounting political risks in Europe has boosted demand for German bonds - seen as one of the safest assets in the world.
"There are short-term circumstances helping demand for German bonds at the moment ... there is demand for safety ahead of the Brexit vote," ING strategist Martin van Vliet said.
Last week, Germany's 10-year government bond yield turned negative for the first time as concern that Britain could vote to leave the European Union in a referendum on Thursday sent investors scrambling for safe-haven debt.
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