Strong demand for German bond issue
Germany attracted strong demand on Wednesday at an auction of its five-year bonds, with investors apparently flocking back to the safe haven of Europe's top economy.
Germany received 8.67 billion euros ($11.6 billion) in bids for five billion euros worth of its five-year paper, known as the Bobl, according to the agency in charge of selling such debt instruments.
The average yield of the debt was 1.1 percent.
Joerg Mueller, a spokesman for Germany's finance agency, said that the auction was still influenced by "volatile and uncertain" market conditions but that investors were returning to the safer German bond market.
"Investors are looking for and trust in the quality of the paper being sold by the benchmark issuer in the eurozone," Mueller said in a statement.
On November 23, weak demand for the German 10-year bond or Bund -- considered the gold standard of eurozone debt -- spooked investors.
Markets fretted that if no one wanted to buy even German bonds, there was little future for the debt of crisis-hit countries such as Italy or Spain.
That auction also undermined Germany's "safe haven" status, which took a further hit this week when ratings agency Standard and Poor's threatened to downgrade Europe's top economy from its cherished AAA credit rating.
-- Dow Jones Newswires contributed to this report--
© 2011 AFP