LONDON: German 10-year bond yields fell to a one-week low on Tuesday after the Bank of England saw weak demand when it attempted to buy long-dated bonds under its relaunched quantitative easing scheme.
The fall tracked moves in British bonds as the reverse auction hinted at an unwillingness for investors to sell debt that could prove problematic for the central bank's stimulus programme.
German 10-year yields reversed an earlier rise and were down 2 basis points on the day at a one-week low of minus 0.10 percent. Most other euro zone yields were lower on the day, giving up an earlier rise after better-than-expected euro zone data.
"The market reaction suggests the Bank of England will struggle to buy back bonds," said Lyn Graham-Taylor, a fixed income strategist at Rabobank .
"But it's still too early in the process to reach a conclusion."
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