LONDON: German Bund futures hit one-month highs early on Monday with low expectations for further progress on the euro zone debt crisis at a meeting of finance ministers later in the day and as Spanish yields returned to dangerous levels.
Finance ministers will focus on follow-up steps to European leaders' plan revealed last month to shore up indebted states and banks, but the latest talks may only highlight the initial deal's limitations.
As euphoria seen in the wake of June's summit disappeared last week, Spanish 10-year bond yields rose back above seven percent on Friday, a level see as unsustainable in the longer-term.
"In the absence of new news or further details on the agreed measures from today's meeting, the path of least resistance is for higher peripheral yields and Spain is back at fairly crucial levels," a trader said.
"The periphery will give us the lead today but it looks like the market is just going to keep going after Spain until it cracks."
September Bund futures were 12 ticks higher at 144.06 after rallying on Friday in the wake of weaker-than-expected US jobs data which added to worries about global growth.
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