LONDON: German Bund futures fell on Thursday after minutes of the US Federal Reserve's October meeting showed policymakers felt they could trim stimulus at one of the next few meetings provided this was warranted by economic growth data.
The minutes more than offset firming pressure fuelled by talk that the European Central Bank was mulling negative deposit rates, which would effectively penalise banks for holding money with the ECB overnight.
Bund futures opened 67 ticks lower at 140.77 while cash 10-year German yields rose 6 basis points to 1.77 percent, tracking a rise in US T-note yields overnight.
"December/January tapering seems to be back in play after markets were thinking previously that tapering would come in March," one trader said.
"But obviously Bunds should outperform (US Treasuries) given that the ECB continues to be dovish.
It's looking very volatile out there. Tapering sentiment changes very quickly and it's not conducive to long-term investment decisions."
The release of euro zone Purchasing Managers indices later in the day will offer markets another opportunity to reconsider the ECB outlook.
France and Spain are due to sell bonds on Thursday.
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