Crisis at German doorstep

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FRANKFURT (MarketWatch) — An auction of German government bonds technically failed Wednesday, underlining fears that Europe’s long-running sovereign debt crisis now threatens the core of the euro zone.

The sale of 6 billion euros ($8.1 billion) of 10-year government bonds, known as bunds, attracted bids totaling just €3.889 billion. The Bundesbank, which conducts auctions on behalf of the Germany’s federal debt agency, accepted €3.644 billion in bids.

That left the central bank to pick up the slack, retaining €2.356 billion of the supply, or 39% of the total amount on offer.

Granted, it hasn’t been uncommon for German debt auctions to fall short as safe-haven demand has driven German yields to record lows in recent months. Six of the last eight bund auctions have required the Bundesbank to pick up some slack, noted strategists at RBC Capital Markets. ..............(more)

The complete piece is at: http://www.marketwatch.com/story/poor-german-auction-shows-crisis-hitting-core-2011-11-23

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