LONDON: German government bond futures opened slightly lower on Monday as investors took profits from Friday's rally to new highs but uncertainty over Greece's future in the euro zone meant a major sell-off was unlikely ahead of elections there next month.
The Group of Eight economies stressed on Saturday that their "imperative is to promote growth and jobs", also recognising problems among European banks and giving verbal backing for Greece to stay in the euro.
But despite US calls for immediate moves to boost growth, there were no signs Germany would soften its stance on austerity as the cure for Europe's debt problems.
"G8 didn't really give us anything, the Greek noise continues, the Spanish banking noise continues, we're in a headline driven environment which is likely to continue until the Greek elections," a trader said.
June Bund futures were 16 ticks lower at 143.48, having risen as high as 144.03 on Friday. Ten-year yields were 1.5 basis points higher at 1.444 percent, just above the record low of 1.396 percent, while two-year paper offered a yield of just 0.6 percent.
"Trading is pretty thin, but there's no reason people won't keep buying these dips until there's some kind of lasting solution, which seems to be far from imminent," the trader said.
Spanish debt may come under further pressure after clearing house LCH.Clearnet SA increased the cost of using the country's bonds to raise funds via its repo service.
Spanish bond yields have risen sharply in recent weeks on worries over its banking system and ability to meet fiscal targets, as well as fears over contagion from any Greek euro exit.
However, recent opinion polls show Greek voters are returning to the establishment parties that negotiated its bailout.
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