NTMA to sell €500m of treasury bills into debt market on edge

The National Treasury Management Agency (NTMA) is set to return to the treasury bills market after a three month absence, with plans to sell €500 million of 12-month notes.

The debt agency will auction the bills on Thursday morning, the NTMA said on Monday, even as global debt markets have sold off in recent sessions on concerns that central banks’ commitment to ultra-low interest rates and asset-purchase programmes may be waning.

The bills sale comes a week after the NTMA sold €1 billion of 10-year bonds to yield an annual rate of 0.33 per cent. However, the yields on the securities have since surged above 0.5 per cent for the first time since July.

Investor concern

Government debt from Europe to the United States to Japan tumbled last week on investor concern that central banks, including the European Central Bank, were reappraising the efficacy of further monetary stimulus to spur growth in their economies and stoke inflation.

Federal Reserve Bank of Boston president Eric Rosengren triggered bets on an interest-rate hike on Friday, saying there was a risk the US economy could overheat if policymakers waited too long before tightening.

German 10-year bonds fell for a third day on Monday, pushing yields to their highest since June 24th, the day results were announced from Britain’s referendum to leave the European Union.

However, some analyst believe that the current wobble on the bond markets will not turn into a full-blown rout.

“Growth is low and going to stay low and inflation is not really a problem,” Charles Diebel, head of rates at Aviva Investors in London said in an interview with Bloomberg TV. “That’s not an environment where bonds get destroyed. It may be that their valuations are relatively rich and we’re experiencing a correction, but we’re not talking about the start of a huge bear market.”