French and German financing needs exceed value of ECB’s bond buying program – Citigroup

According to analysts at Citigroup Inc, France’s funding needs are so severe that they exceed the value of the European Central Bank’s (ECB) bond-buying program by 20 billion euros. 

France’s requirement is estimated at 138 billion euros, according to Citigroup strategists.  Meanwhile, Germany faces an even worse predicament with its shortfall estimated at 193 billion euros, as noted by Bloomberg. 

As such, one may expect government bond yields to extend their recent rise. While German is scheduled to auction 5.5 billion euros worth of conventional bonds on Tuesday and Wednesday, France is scheduled to sell three conventional and three inflation-linked notes totaling eight billion euros.

The yield on the German 10-year bond rose by 8.7 basis points last week – its biggest weekly gain in two months.