Germany 2-Year Schatz Auction

Info

History

Chart

Impact:

Low

Source: Department of Treasury

Next Release:

Date:

Period:

What Does It Measure?

The Germany 2-Year Schatz Auction measures the government’s ability to borrow funds through short-term debt instruments known as Schatz securities, which are bonds with a maturity of two years. This auction assesses investor demand for these securities, influencing funding costs, interest rates, and overall government borrowing capacity.

Frequency

This auction occurs regularly, held every month, and results are typically released shortly after the sale concludes.

Why Do Traders Care?

Traders closely monitor the outcome of the Schatz Auction as it affects interest rates and can signal shifts in monetary policy, thereby impacting the Euro (EUR), German stock indices, and bond prices. A strong auction with high demand is bullish for the EUR and equities, while a weak auction may suggest economic concerns, bearish for both currencies and stocks.

What Is It Derived From?

The auction results are derived from competitive bids submitted by various institutional investors, banks, and individuals, with the total amount offered for sale versus the total amount subscribed providing insight into market sentiment. The bidding process helps determine the yield on the bonds, which reflects the level of interest rates investors are willing to accept.

Description

Preliminary reports indicate initial demand and outcomes shortly after the auction, while final results, confirmed after all bids are processed, provide a clearer picture of financial market reactions. The auction highlights how investors assess short-term economic conditions, including potential shifts in interest rates or inflation expectations.

Additional Notes

The Schatz Auction serves as a critical coincident indicator of market sentiment regarding the German economy and broader Eurozone dynamics. The results may be compared with similar bond auctions in the region, providing insights into relative investor confidence in government debt across different countries.

Bullish or Bearish for Currency and Stocks

Higher than expected demand: Bullish for EUR, Bullish for Stocks. Lower than expected demand: Bearish for EUR, Bearish for Stocks. The tone of the auction could be interpreted as hawkish if it implies rising interest rates due to higher demand, which is usually good for the EUR but bad for Stocks due to increased borrowing costs.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Time	Actual	Forecast	Previous	Surprise