LONDON: British gilts rose in early trade on Wednesday after euro zone finance ministers failed to reach an agreement overnight on releasing another aid tranche for Greece, dampening appetite for riskier assets.
Greece's international lenders failed to agree on how to get the country's debt down to a sustainable level. Eurogroup Chairman Jean-Claude Juncker said the delay was caused by "technical reasons" and other officials said a deal was close.
"With market sentiment generally positive in the past few days, renewed concerns surrounding Greece could act as a catalyst for a resurgence of negative sentiment," said Barclays strategists.
At 0837 GMT, the December gilt future was 11 ticks higher at 119.53, broadly in line with the equivalent Bund , which was 15 ticks higher at 142.53.
A key focus for gilt investors on Wednesday will be the minutes from the Bank of England's latest policy meeting, due for release at 0930 GMT.
The minutes will be scrutinised for any insight into why the central bank decided against extending its 375 billion pound asset-purchase programme, or quantitative easing (QE), and why it agreed to return to the Treasury some 35 billion pounds of interest paid on the gilts it had bought.
Markets also digested comments from BoE policymaker Martin Weale, warning further stimulus would be inflationary.
British public sector borrowing data will also be eyed with interest by gilt investors, for further clues on the health of the UK economy.
"Any evidence that the ongoing numbers remain soft might point towards some disappointment in terms of likely reduction in issuance and, consequently, some cheapening pressure on asset swap spreads," Barclays strategists said in a note.
Ten-year gilt yields were steady at 1.84 percent. Their spread versus Bund yields was broadly steady at 43 basis points.
Market participants also expect a syndicated sale of 0.125 percent 2044 index-linked gilts on Thursday.
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