France held a well received debt auction on Monday, reaching the top end of the 7.4 to 8.7 billion euros target spectrum. The French debt management agency, Agence France Tresor (AFT) sold 8.6 billion euros of short-term bills, helping bring down yields on French treasury bills from levels seen a week ago.
The debt sale was deemed satisfactory, given the timing. France was stripped of its long-term AAA sovereign rating by one notch to AA+ with a negative outlook, by ratings agency Standard and Poor’s on Friday.
EURUSD was little changed against the US dollar immediately after the auction results around 14:00 GMT, trading at around 1.2674 but soon dipped down to 1.2657 at 14:36 GMT before rebounding to 1.2673 by 15:00 GMT.
A break down of the auction results are as follows:
AFT sold 4.5 billion euros of the 12-week BTF notes at a yield of 0.165 percent, barely changed from the 0.166 percent at the last auction on Jan. 9. Investors put in nearly twice as many bids as there were bonds on offer, giving a so-called bid-to-cover ratio of 1.9.
Also, AFT sold 2.2 billion euros of 25-week BTFs at a yield of 0.281 percent, compared with 0.286 percent in the last auction. The issue drew a bid-to-cover ratio of 2.053.
Finally, AFT sold 1.9 billion euros of 51-week BTFs at 0.406 percent, down from 0.454 in the last auction and with a bid-to-cover ratio of 2.108.