LONDON: German Bund futures were steady on Wednesday as the market readied for a sale of five-year bonds, but were supported by wider euro zone funding concerns ahead of Spanish and Italian debt auctions later in the week.
Germany will sell 4 billion euros of new five-year bonds with a 0.75 percent coupon. Recent German auctions have seen mixed demand caught between desire for low risk assets but with returns at euro-era lows putting off some primary market investors.
"It's a small amount for a new bond and should go okay although German auctions aren't really the focus at the moment," a trader said.
March Bund futures were 2 ticks lower at 138.70, with 10-year yields a basis point lower at 1.875 percent.
"We've slowly been seeing some real money coming back to the market but new issues are where the cash is being put to work at the moment," the trader said.
Although lower on the week, Bunds are still well supported as Greece scrambles to secured further vital aid and investors were also on edge before debt auctions later in the week from Spain and Italy which will test appetite for the bonds of the two countries now at the forefront of the debt crisis.
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