Germany raised €4 billion today with a sale of its 10-year bonds, considered the gold standard of euro zone debt.
Germany received €5.14 billion worth of bids for its offering of €5 billion. The average yield on the €4 billion in bonds sold was 1.93%, up marginally from the 1.905% on the secondary market yesterday evening.
Germany's Finance Agency held back €1 billion in bonds to sell later on the secondary market in what is a standard practice.
In November, a similar auction of 10-year debt attracted minimal demand, sending markets into tailspin as investors feared that even Germany was losing its safe-haven status due to the euro zone crisis.
At that time, Germany received bids for only €3.9 billion worth of Bunds, despite offering €6 billion, in what the Finance Agency called a "reflection of the extraordinarily nervous market conditions." The average yield on that auction was 1.98%, the agency added.
Germany to power ahead in 2013, says DIW
Germany, Europe's economic powerhouse, will escape recession this year, despite the ongoing euro zone debt crisis, and return to solid growth in 2013, one of the country's top institutes said today.
After a possible short and shallow contraction of the economy at the beginning of this year, Germany will grow by 0.6% in 2012 and then by 2.2% in 2013, the DIW institute said in New Year forecasts.
Nevertheless, the institute's head of economic research, Ferdinand Fichtner, warned: "This will only happen if politicians come up with a convincing solution to the euro zone crisis in the next few months."
Continued chaos in the 17-nation zone could lead to a "negative spiral of rising unemployment and falling demand" in Germany, Fichtner cautioned.
The turmoil in the sovereign debt markets of several euro countries should lead to an overall shrinking of the euro zone's economy in 2012, but it too was expected to recover the year after, to grow by 1%, the DIW said.
"If the debt crisis gets even worse and France, for example, becomes infected, then the recession could be significantly worse," said Fichtner.
German Economy Minister Philipp Roesler also warned that growing risks to the global and eurozone economies could end up harming Europe's powerhouse.
Speaking to business daily Handelsblatt, Roesler said the government's next major economic report, due mid-January, would likely "confirm" the risks identified towards the end of last year.
