EURO GOVT-Bunds rise as Fed sticks with policy on stimulus

LONDON Thu Jan 31, 2013 2:11am EST

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LONDON Jan 31 (Reuters) - German Bund futures rose on Thursday after the Federal Reserve said it would maintain its policy of stimulus for the economy to curb unemployment in the United States.

The Fed left in place its monthly $85 billion bond-buying stimulus plan, even as it indicated a recent stall in U.S. economic growth was likely to be temporary. That gave a lift to U.S. Treasuries, which often move in tandem with Bunds as the two assets are seen among the safest instruments to invest in.

At 0704 GMT, Bund futures were 50 ticks higher at 141.93.

"The read is that they are holding on to their policy because growth has paused. I don't think there are any hints in there (Fed's statement) that suggest there are going to change (policy) any time soon," one trader said.

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