LONDON: German Bund futures opened lower on Wednesday as traders pushed for cheaper prices to make way for a 10-year Bund auction later in the session though losses were seen limited by persistent worries over growth and the euro zone's debt crisis.
An ongoing row over demands by Finland for security on loans to Greece in the form of collateral -- which analysts say may complicate its bailout package -- is keeping Bund yields anchored near ultra low levels.
German Chancellor Angela Merkel waded into the row on Tuesday, rejecting any special treatment for Finland in euro zone guarantees, sources in her CDU parliamentary group told Reuters.
"I don't expect the (Bund) auction to go that well because of the low coupon. It could weigh on the market a little bit but I don't expect it to provide any longer-term impetus for a selloff," Credit Agricole strategist Peter Chatwell said.
"Structurally, nothing much has changed with the growth picture and the euro zone crisis. What's happening with the Greek collateral issue is just showing how discordant policymakers within Europe are appearing and that's always going to support the market."
The Bund future was last 11 ticks lower on the day at 135.17 compared with 135.28 at Tuesday's settlement close.
Cash 10-year Bund yields were little changed at 2.12 percent, some 13 basis points below the coupon offered on the new 10-year paper.
The European day's major piece of economic data is Germany's Ifo sentiment index.
Copyright Reuters, 2011
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