LONDON: German Bund futures rose on Monday, approaching their all time highs, as investors flocked to the safety of low risk assets with worries mounting that Spain will need a sovereign bailout and over Greece's future in the euro.
The Spanish region of Murcia said it would seek financial assistance from the government, and media reported half a dozen other regions were ready to follow in the footsteps of Valencia, which said on Friday it would seek help..
Spanish 10-year government bond yields jumped above 7 percent last week, a level seen as unsustainable in the longer-term and the yield curve flattened sharply, reflecting an increase in perceived credit risk.
Meanwhile, the Greek prime minister said on Sunday that the country was in a "Great Depression" similar to the one in the 1930s, as international lenders were scheduled to gather in Athens to discuss the terms of further rescue payments. .
"It's not looking good for Greece, it's hard to see how they can stay in the euro and then there's Spain," a trader said.
"Core yields are at or near multi-year lows and the periphery is going to stay under pressure. Italy will get dragged down with the rest of them."
September Bund futures were 26 ticks higher at 146.03, nearing June's 146.89 record high.
Ten-year US Treasury yields hit their lowest since the early 1800s in Asian trading, according to Reuters data, at 1.4365 percent, while yields on 10-year Japanese government bonds fell to 9-year lows.
Comments
Comments are closed for this article.