LONDON: The German Bund future rose at the open on Monday as caution set in ahead of a euro zone finance ministers meeting later in the day where they will decide what terms of a Greek debt restructuring they are ready to accept.
Private creditors said on Sunday they had come to the limits of what losses they could concede in a Greek debt swap, putting the ball in the court of the EU and the IMF in a tense race against the clock to avoid a messy default.
Uncertainty over the outcome of Greek talks could also provide a favorable backdrop for the sale of French and German treasury bills.
"I don't expect any problems getting them away, because they are short-term," Michael Hewson, market analyst at CMC Markets said.
"Everyone knows that unless there is a restructuring of the Greek economy, we can have 100 percent haircut, it won't change a thing."
The German Bund future rose 19 ticks to 138.31, having fallen in the previous week.
After several rounds of talks, Greece and its private creditors are converging on a debt swap deal that would stave off bankruptcy for Athens, with investors shouldering losses of up to 70 percent. But some details were still unresolved.
"We see chances for a temporary rebound in Bunds today and install a tactical long," Commerzbank said in a research note.
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