Bund Futures Higher in Holiday-Thinned Trade |
LONDON, Jan 3 (Reuters) – German government bond futures opened higher on Monday, with trading subdued by market holidays in parts of Asia and the UK.
Sovereign debt markets are expected to gear up again this week after the Christmas break, with bonds of the euro zone's more indebted nations likely to come under renewed pressure as governments begin their 2011 fundraising programmes.
German and France kick-off the year's supply with auctions on Wednesday and Thursday, while Portugal — seen as the next most likely to need financial assistance — will also sell T-Bills on Wednesday.
At 0703 GMT, March Bund futures were 0.20 points higher at 125.50. Two-year bond yields were 3 bps lower at 0.829 percent, with 10-year yields half a basis point lower at 2.945 percent.
German 10-year yields ended 2010 almost 50 bps lower than in January after Bunds came under pressure in the fourth quarter as markets priced in a better global economic outlook and worried over the cost to Germany if more indebted euro zone countries needed bailing out.
Euro zone manufacturing PMIs for December are released from 0843 GMT, with the composite regional figure at 0858 GMT seen at 56.8.
Data overnight showed China's factory inflation cooled in December as manufacturers expanded more slowly after a strong run in growth, reducing the need for the country's central bank to tighten monetary policy too far.
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