02102016Wed
Last update: Wed, 10 Feb 2016 05am
Home» Markets - Fixed Income » Europe

Bund selloff slows as US faces new budget battles

german-bondsLONDON: German Bunds edged lower on Thursday, with the impact of a deal to avert large-scale fiscal tightening in the United States fading as politicians there ready for bigger budget battles in coming weeks.

 

President Barack Obama signed a deal on Wednesday to stave off some $600 billion in automatic tax hikes and spending cuts. But Republican lawmakers, angry the deal did little to curb the federal deficit, said they would use a debate over lifting the US debt ceiling to win deep spending cuts.

 

Failure to raise the borrowing limit could mean a US debt default.

 

 "We had a knee-jerk reaction yesterday... There is still a lot of work to be done ... on spending cuts," one trader said.

 

At 0703 GMT, safe-haven Bund futures were 5 ticks lower at 144.02, having fallen by almost 150 ticks on Wednesday.

 

Center>Copyright Reuters, 2013