Markets

Bunds creep lower, Greek fallout to support

LONDON : Bund futures crept lower on Monday after a sharp rally in the previous session but disagreements over a solutio

Published June 13, 2011 Updated June 13, 2011 07:35am

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By Syed Murtaza Gheblehzadeh

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The September Bund future was 10 ticks lower at 125.78 as investors cashed in on 70 ticks of gains in the previous session.

But a stalemate over the form which a Greek debt restructuring should take would likely continue to offer the market some support as investors also braced for a bout of economic data out of the United States this week.

"The stand-off between politicians and (ECB President Jean-Claude) Trichet continues," said a trader in London.

"Bunds are well-underpinned for some time."

German lawmakers last week backed more aid for Greece in a non-binding vote after getting assurances from Finance Minister Wolfgang Schaeuble that private creditors would share the costs of a new rescue package, but rating agencies have warned against the consequences of a debt restructuring.

Safe-haven assets could also find support from a series of US data this week which will show whether the economy is struggling with a soft-patch or a downturn.

"The risk is that we continue to see the data slowing down a bit. It's another potential support for the market," the trader added.

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