Seeking Alpha

Germany borrows for free; euro to one-year low

  • Germany today raised just over €4B of two-year money, with the notes priced to yield 0.00%. Demand was strong, totaling nearly €8.3B.
  • The sale comes amid geopolitical risk and the slowdown in the European economy, bringing forth the possibility of further stimulus from the ECB.
  • This isn't the first time two-year borrowing costs have fallen so far. Amid the debt crisis two years ago, investors paid Germany to lend it money, accepting a negative 0.06% yield at an auction.
  • The euro is down 0.25% to $1.3288, it lowest level in about a year.
  • ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
From other sites
Comments (2)
  • Philip Marlowe
    , contributor
    Comments (1289) | Send Message
     
    I do not get it. Why would someone buy bonds with 0 yield? Why not keep the cash?
    20 Aug 2014, 11:16 AM Reply Like
  • Humble Value Miner
    , contributor
    Comments (453) | Send Message
     
    it's a bet on the Deutsche Mark (after Euro collapse). But if you'd really know what is hidden in German banks, and where German export will go in case of Euro collapse, you won't want to bet on Deutsche Mark. I guess somebody "must" do it anyway, as hedging.
    20 Aug 2014, 04:49 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs