LONDON: German Bund futures pushed higher on Tuesday as investors fretting over Greek indecision on the strict terms of a new bailout deal vital to avert a chaotic default, keeping safe-haven government bonds well bid.
Athens' protracted debt talks hit another snag on Monday after feuding political leaders postponed a decision on the bailout terms by 24 hours, reviving fears of a disorderly default that could hurt bigger euro zone economies. The country's leaders need to agree to the painful austerity measures to receive a 130 billion euro rescue package from the International Monetary Fund and the EU.
"We're still in this risk-off risk-on mode. It's all about Greece," a trader said.
"At the end of the day there's the big coupon payment on March 20 and that's the date we're working around. Every day that goes by is a day nearer trouble. The clock is ticking hence time is running out," he said.
The Bund future was last 22 ticks up at 138.85 compared with 138.63 at Monday's settlement while German 10-year yields were half a basis point lower at 1.89 percent .
Bunds could come under some selling pressure as the Netherlands auctions 5 billion euros of new 10-year bonds offered at a spread of betwenen 46 and 50 basis points above German paper.