The Czech finance ministry sold CZK6bn (€221mn) in 3.5-year zero coupon bonds at an auction on June 29, the central bank announced.

For the first time at a debt auction this year, the allotted volume was in line with the maximum amount on offer, as yields fell deeper into negative territory. Viewed as a haven, Czech assets have suffered little in the wake of Brexit, and are now benefitting from expectations that global monetary policy will seek to add further stimulus to try to stave off the effects of the UK's vote to leave the EU.

The average yield at the auction plummeted to -0.049% from -0.016% at the previous sale held a month ago. The issue attracted bids of CZK6.4bn, higher than the CZK3.4bn demand seen at the May 18 auction. This was the third tranche of the bonds, which mature on July 17, 2019.

The ministry also sold CZK4bn of an 11-year 1%-coupon bond, also in line with the upper bound. Demand slightly strengthened with the value of submitted bids rising to CZK5bn from CZK4.97bn offered at the previous auction held in January. The average yield fell to 0.431% from 0.693%.

Competing the auction was a 15-year bond, of which the ministry sold CZK3bn, also in line with the upper limit. Offers reached CZK6.3bn and the average yield dropped to 0.759% from 0.925%.

Despite plans to increase issuance activity to take advantage of low borrowing costs and strong interest among both domestic and foreign investors, actual issuance has remained well-below upper bounds in most auctions so far this year as the ministry has chased negative yields.

The ministry has said it does not plan to hold bond auctions next month. This will be the first month since January when the ministry will refrain from selling bonds.