Investors paid to lend Germany a combined 3.9 billion euros for six months on Monday, accepting a loss in a renewed flight to safety from the eurozone debt crisis. France, by contrast, had to pay more to borrow short-term funds, albeit that demand for its bills was strong. Investors are increasingly focusing on a handful of eurozone economies, notably Germany and The Netherlands, to park their money.
While yields on the bonds of peripheral eurozone countries have hit record highs in recent months on concerns about the debt crisis, Germany's yields have fallen to record lows. On Monday they went negative for the first time at a regular auction, sliding to -0.0122 percent compared with a positive return of 0.001 percent at a similar auction in December.
Demand at Monday's auction was solid, with the sale drawing bids worth 1.8 times the amount on offer, Bundesbank data showed. Yields rose in France's second Treasury bill sale of the year despite strong demand. It came on the heels of solid demand at the first French auction of long-term OAT bonds of 2012, where yields rose only slightly despite nervousness that France is on the brink of losing its triple-A credit rating. The yield on the 26-week bill was 0.286 percent, after 0.074 percent previously.
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