Bund futures edge up, focus on Greek talks

LONDON: German Bund futures edged higher at the open on Friday, extending the previous session's hefty gains, inspired by the Federal Reserve's pledge to keep rates low and uncertainty over the outcome of Greek debt talks.

Portuguese government bonds were seen remaining under pressure after five- and 10-year yields rose to euro-era highs on worries that the country may follow in Greece's footsteps and require a second bailout or restructure its debt.

Athens is locked in fraught talks with its private creditors to restructure its debt and needs a deal quickly to avert an unruly default when a major bond redemption comes due in March. Greece's creditors are demanding that the European Central Bank contribute to a deal to put the country's messy finances back on track.

"There's a bit of chatter about progress in Greek talks but I'm not convinced and Portugal (is) struggling to put it mildly. The only time we've seen the ECB buying was in Portugal this week, we haven't seen them anywhere else," a trader said.

The Bund future was last 20 ticks up at 138.89 compared with 138.69 at Thursday's settlement.

"The Fed action does support markets still and I can't see any reason why we shouldn't see buyers on any pullbacks in Bunds," the trader added.

Copyright Reuters, 2012