Germany auctioned 10-year bonds to yield less than 1 percent for the first time

Germany auctioned 10-year bonds with yield below 1 percent for the first time, since a deteriorating euro-area economy and the prospect of a further incentive from the European Central Bank reduce borrowing costs across the region.

The nation allotted 4.1 billion euros ($5.2 billion) of the 1 percent securities due in August 2024 at an average yield of 0.93 percent, the least since Bloomberg started tracking the data in 1993.

Investors bid for 4.66 billion euros of the bunds, below the planned sale size of 5 billion euros.

Today's data showed euro-area factories cut prices in September by the most in more than a year and German manufacturing shrank, underlining the mounting challenge facing ECB President Mario Draghi to avert deflation.

Policy-makers meet tomorrow and are expected to give more details of an asset-purchase plan.

In the secondary market, the 10-year yield fell two basis points, or 0.02 percentage point, after the sale to 0.93 percent at 10:50 a.m. London time.