A German sovereign bond auction failed on Wednesday as investors shunned one of the world’s most liquid and safe assets in a warning for governments seeking to raise record amounts of debt to stimulate slowing economies. The fate of the first eurozone bond auction of 2009 signals trouble for plans by governments globally to issue a total estimated $3,000bn in debt this year, three times more than in 2008. The 10-year bonds failed to attract enough bids to reach the €6bn the German government wanted. Bids of €5.24bn, a cover of only 87%, amounted to the second worst auction on record in terms of demand.

This entry was posted by Gwen Robinson on Thursday, January 8th, 2009 at 5:46 and is filed under Capital markets. Edit this entry.