Investors focus on Austria's century bond, Germany's Ifo rebounds

Germany meanwhile sold 2.127 billion euros in the first reopening of its 15-year bond via auction. French president Emmanuel Macron and Dutch Prime Minister Mark Rutte were able to move forward during talks to resolve differences over the European Union recovery fund, a French presidential official said on Wednesday.

Euro zone bond yields were broadly steady on Wednesday, as investors focused on a new century bond from Austria, while a record bounce-back in German business sentiment did little to move markets. Austria is selling a 100-year bond via a syndicate of banks to raise 2 billion euros ($2.26 billion) in one of the longest-dated bond sales since the coronavirus crisis, a deal analysts said reflected demand for yield and longer-dated assets from pension and insurance funds.

Business morale in the euro zone's largest economy recorded its strongest rise ever in June and Germany should return to growth in the third quarter, the Ifo institute said. . But the data had little impact on markets. Germany's 10-year bond yield was last unchanged at -0.40% after briefly rising to its highest in nearly two weeks at around -0.39% at the start of the session.

Italian 10-year yields were up 2 basis points to 1.36% "It's clearly after yesterday's PMIs that the bar for an additional surprise was extremely high," said Michael Leister, head of interest rate strategy at Commerzbank in Frankfurt.

Business activity indexes on Tuesday surprised to the upside, supporting hopes for a V-shaped recovery and boosting risk appetite across markets, which led safe-haven yields such as Germany's to rise. Germany meanwhile sold 2.127 billion euros in the first reopening of its 15-year bond via auction.

French president Emmanuel Macron and Dutch Prime Minister Mark Rutte were able to move forward during talks to resolve differences over the European Union recovery fund, a French presidential official said on Wednesday. The Netherlands leads a coalition of fiscally conservative Northern European countries that would prefer the 750 billion euro fund to be offered as loans, rather than grants. ($1 = 0.8841 euros)

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