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Demand moderate, yields still drop for twelve-month T-bills at auction

The State Debt Management Agency (ÁKK) sold HUF 50 billion of twelve-month discount T-bills at an auction on Thursday, the announced amount. Oversubscription was moderate but yields still fell sharply from the previous August 11 auction and dropped a touch from Wednesday's benchmark.

Bids for the HUF 50 billion offer totaled HUF 80.9 billion down from HUF 92.3 billion for the same-size offer at the previous auction.

Average yield at the auction was 5.44%, 1bp lower than the secondary market benchmark on Wednesday and 22b lower than the yield at the previous auction of the bills two weeks earlier. Auction yields varied between 5.39% and 5.49% as the range came down and also narrowed from between 5.50% and 5.70% at the August 11 auction.

Twelve-month auction yields fell steadily from the beginning of January to the middle of April and has risen since. The average yield dropped just less than 100bp in the first four months, from 5.90% at the first January auction to 4.91% at the April 15 auction before the rise, prompted by the Greek debt troubles, started. Twelve-month auction yields peaked at 5.75% on July 22 and dropped since. (MTI – Econews)