LONDON: Bund futures inched higher on Wednesday with markets edgy ahead of a Portuguese parliamentary vote on new austerity measures which could topple the country's government, though an upcoming German bond sale capped gains.
At 0705 GMT the Bund future was 11 ticks higher at 122.13.
The vote in Lisbon takes place later in the day on whether to approve a tough new package of deficit-fighting measures, and looks set to keep the pressure on debt from the euro zone's lower-rated countries. Short-dated Portuguese yields rose relative to Bunds in the previous session. "This certainly isn't going to help things.
The periphery wobbled yesterday on vague rumours which shows how fragile the whole situation really is," a trader said.
Germany will later issue 10-year debt in the final reopening of its January 2021 bond , with the ongoing conflict in Libya and the Middle East likely to see demand from risk-averse investors support a smooth sale.
The 10-year German bond yield was flat at 3.254 percent, with the two-year yield also unchanged on the day at 1.704 percent.
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