Bonds sale sees German borrowing hit record low

Mirroring results of Irish and Spanish sales on Tuesday, the auctions showed there is solid demand for Eurozone bonds as the global economic outlook deteriorates, with investors willing to buy debt of riskier issuers at much lower prices than earlier this year.

The yield on three-month Portuguese bills almost halved from the previous auction in June, when fringe Eurozone borrowers were still recovering from a sell-off sparked by worries they and others could follow Greece into crisis.

"There still seems to be decent and sufficient demand out there from investors who are willing to buy at these prices and overall the funding capabilities of the peripheral seems to be well intact," said Michael Leister, strategist at WestLB in Dusseldorf.

The new 10-year German bond showed a record low average yield of 2.37 per cent compared with 2.56 per cent for the previous tender in July.