LONDON: German 10-year Bund yields rose to 0.70 percent on Tuesday as investors cut exposure before a long-dated German debt auction and a Federal Reserve meeting later this week.
Markets see a one-in-four chance the Fed will hike interest rates for the first time since 2006 on Thursday, with the probability falling sharply in recent weeks due to worries over the impact of a slowdown in China.
Germany plans to sell 30-year bonds on Wednesday. "The market was getting a bit rich in terms of valuation ahead of the FOMC meeting," said Cyril Regnat, rate strategist at Natixis. "There may be some profit-taking at the long end as we have a tap on the Bund 2046 coming up."
"Flows are certainly behind this move as I don't see any fundamental story. The economic news front is more on the supportive side."
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