German Bond Auction Failure Today

[bbmac]

German Bond auction fails to attract sufficient buyers - is this a worrying development in the ongoing Eu crisis - ie - is the market going straight for the heart now after wounding the peripheraral body parts of the Eu ?

Germany's Bond-Auction Fail: Here's What It Means - MarketBeat - WSJ

The centre is not holding: German bond auction falls short | TradingFloor.com

G/L

 

[Martinghoul]

No, this is the mkt giving up on the EUR... Nobody wants to own anything, esp if it's EUR-denominated.

 

[bbmac]

Certainly Eurusd has reacted accordingly today with a downside breech of daily support and ascending trend line.,...daily candle not closed yet of course but looking very bearish so far. How keen will Germanuy be now for ECB to be active in bond market ? - might this be a precursor to the long anticipated 'big bazooka' / game changing/get ahead of the curve by the Eu politicians ?

G/L

No, this is the mkt giving up on the EUR... Nobody wants to own anything, esp if it's EUR-denominated.

 

[safvan]

Any seasoned trader who has made big money in trading world would be able to tell you that EUR is going to die.

It never picked up steam from the very time it was launched. The yearly chart looks like a failed IPO.

 

[DionysusToast]

This is merely investors way of telling the central banks to sort their sh1t out.

 

[new_trader]

This is investors (quite rightly) saying to Governments that because of all this inflation you are creating we want higher interest rates for our loans to you. The Governments are saying f*ck you, we’ll just get our Central Banks to print up the money and buy our debt so we can continue to borrow and spend cheaply and recklessly, suck on that gold standard!

 

[Martinghoul]

This is investors (quite rightly) saying to Governments that because of all this inflation you are creating we want higher interest rates for our loans to you. The Governments are saying f*ck you, we’ll just get our Central Banks to print up the money and buy our debt so we can continue to borrow and spend cheaply and recklessly, suck on that gold standard!

Inflation? In the EMU? What planet are you on, n_t? Furthermore, what does this rant have to do with German debt? The ECB is NOT printing the money and NOT buying German bonds.

I know you have strong views on these subjects, but don't you think it's sometimes appropriate to think before you start with the slogans?

 

[Martinghoul]

might this be a precursor to the long anticipated 'big bazooka' / game changing/get ahead of the curve by the Eu politicians ?

G/L

Who knows? Maybe...

 

[scose-no-doubt]

Treasuries picking up the slack and then QE3 hints. Is it likely that the us (or anyone else) are gonna try flatten the further down the curve sharpish and cash in on cheap funding/rollover from this capital flight? Lot of talk about corps but I fail to see how the risks to business are not serious.

 

[new_trader]

I keep forgetting, Martinghoul is terrified of the gold standard.

 

[scose-no-doubt]

 

[Martinghoul]

I keep forgetting, Martinghoul is terrified of the gold standard.

Why would you say something so silly, n_t?

 

[Martinghoul]

Treasuries picking up the slack and then QE3 hints. Is it likely that the us (or anyone else) are gonna try flatten the further down the curve sharpish and cash in on cheap funding/rollover from this capital flight? Lot of talk about corps but I fail to see how the risks to business are not serious.

Well, not sure about the US, but the UK govt is sure benefitting massively from the flight out of EUR. For example, did you know that the Japanese have bought more gilts this year than any other sovereign debt?

 

[scose-no-doubt]

What's that cos they've had their fill of treasuries through intervention? Suppose sterling is the next logical bastion after us & eur.
Do they have a program or something or is this to do with fx again?

Could be a nice short there if the purse is finite lol

 

[Martinghoul]

What's that cos they've had their fill of treasuries through intervention? Suppose sterling is the next logical bastion after us & eur.
Do they have a program or something or is this to do with fx again?

Could be a nice short there if the purse is finite lol

Well, I have no idea what their exact reasons might be, but maybe they feel that when you're getting out of EUR, you wanna get into something that's close to it, like GBP. And yes, maybe they feel that they have enough treasuries already and sterling is a logical candidate. I don't think it's a program of any sort.

Yep, there are some nice shorts in the gilt market, if you feel particularly brave.

 

[scose-no-doubt]

Well I can't (be arsed learning to) price them the quanty way so it's a no go.

Tried to re-jig the the excel downloads you find floating about with little success. And they're all american anyway!

Anyway how do you know who's buying? Can you find size and duration too?

 

[Martinghoul]

Anyway how do you know who's buying? Can you find size and duration too?

I don't *know* anything, sire... It's all just guessing and flows reported sometimes by the dealers (sometimes they keep the info for themselves).

 

[scose-no-doubt]

How very dare you purport that these fine gentlemen (and ladies!) would unscrupulously act on information not available to the public!

 

[Martinghoul]

How very dare you purport that these fine gentlemen (and ladies!) would unscrupulously act on information not available to the public!

There's nothing really unscrupulous about it... At best they only have one small piece of the puzzle, which means they're really guessing along with everyone else.

 

[scose-no-doubt]

MG few questions if yo might, chaperoo.
Is it strictly true that the auctions are priced so that there is no economic benefit or non-arb potential on issuance?
Is actual yield dynamic depending on price of the bond or do rates always adjust accordingly?