Germany paid a record low rate to borrow for 10 years, as investors flocked to park cash in the benchmark bonds of Europe's top economy.
Germany paid an average rate of 1.31% at an auction of 10-year bonds, or Bunds, down from 1.52% at the previous sale in June.
This is according to the German Finance Agency, which organised the auction.
"In a still very tense market environment, the search for quality was the decisive factor" for the low rate, the agency said.
Demand was solid, with investors bidding €6.391 billion, while only €4.153 billion were allotted, with the so-called cover ratio rising to 1.5 from 1.4 in June.
The agency said it retained €847m worth of bonds for market-tending purposes, as is its usual practice.
As the euro zone debt crisis shows no sign of easing, investors have scrambled to put their cash in the safe haven of German bonds. On Monday, Germany paid a negative rate on six-month bonds, meaning that investors were effectively paying to lend Berlin money.
