* Eurozone suburban government bond yields tmsnrt.rs/2ii2Bqr
April 13 (Reuters) – A 50-year bond sale from Austria on Tuesday will test further investor interest in ultra-long-dated debt after high demand for a similar sale from Italy last week, while Spain will sell a 15-year newspaper.
The prospect of a substantial new supply helped push bond yields in the euro area slightly higher in early trading Tuesday. Bond yields move inversely with prices.
The two countries sold their debts, also including four-year bonds from Austria, through a syndication, in which issuers use banks to sell their debt directly to investors, according to a lead manager memo seen by Reuters.
Investors must also digest the reopening of 15-year bonds from Italy to 2 billion euros, 1 billion pounds of 50-year bonds from the UK, and $ 24 billion in 30-year US bonds, all of which will be sold through more traditional means. auction format.
German 10-year yields, the benchmark for the bloc, were up by about a basis point to -0.29% at 0738 GMT. ING analysts said they expect Tuesday’s supply to cause long-dated government bonds to underperform.
The deal follows last week’s publication of a 50-year syndicate from Italy, which received nearly 13 times the demand for the five billion euros it raised.
After a strong start to the year, sales of ultra-long debt have slowed since February, when yields rose sharply as investors bet that a large US fiscal stimulus package will reignite growth and inflation that hurt safe-haven bonds.
France, Belgium and Spain all sold their 50-year bonds earlier in the year as they tried to lock in lower borrowing costs. But all of those bonds fell sharply during the volatile February patch.
The European Central Bank has since calmed European bond markets by increasing the rate of buying its assets.
The price of a 50 year bond, among the longest term issued by the government, is more sensitive to changes in the benchmark interest rate. The fact that the ECB, whose asset purchases have pushed down the euro area’s borrowing costs, has not purchased bonds in more than 30 years adds additional sensitivity.
On the data front, investors will be watching the German ZEW investor morale survey and US inflation data. A Reuters poll forecasts US inflation to jump 2.5% year-on-year in March, from 1.7% in February.
Reporting by Yoruk Bahceli; Edited by Catherine Evans