LONDON: Bund futures rose on Thursday as persistent concerns over whether policymakers are doing enough to tackle the euro zone's debt crisis and a weak economic outlook generated strong investor demand for low-risk assets.
Bund futures were last 47 ticks higher on the day at 134.39, building on gains made in after-hours trading to bring the contract's record high at 134.77 into sight.
First resistance for the Bund future was seen at last Thursday's high of 134.54 while on the downside support came at Monday's low of 132.47, according to technical analysis by Futurestechs.
The rally built on gains made in the previous session after markets looking for more positive steps to address the region's debt crisis were left disappointed by the outcomes of a Franco-German summit which instead focused on longer-term issues.
That disappointment was set to keep Bunds pushing higher, with investors likely to use any price dips as a buying opportunity, Commerzbank said. The bank recommended a short-term long position in futures with at target of 134.50.
Weak data from euro zone powerhouse Germany has put investors on high alert for signs that the tentative recovery in euro zone growth could falter -- an outcome that would multiply problems facing the region's weakest states.
The US data calendar offers up the most high profile economic indicators later in the session when inflation, employment and housing data are released along with forward-looking economic sentiment survey results.
"Today's US macro data looks set to confirm a weak and uneven growth pattern and should be bond market supportive at the margin," Commerzbank strategists said.
Copyright Reuters, 2011
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