Germany’s Schatz yield turns negative
The two year German government bond – known as Schatz – sold at a negative interest rate today for the first time ever as demand outstripped supply twice over.
The level of demand saw the cover ratio rise to 2x from 1.9x seen at the last auction in June. Despite paying a 0% coupon, investors were prepared to bid an average price that resulted in a yield of -0.06%.
The Bundesbank, responsible for auctions of debt issued by the Germany Finance Agency, sold about €4bn worth of Schatz, maturing 13 June, 2014.