LONDON, Sept 12 German Bund futures slipped at
Wednesday's open as investors awaited a crucial legal ruling on
the validity of the euro zone's rescue mechanism and the launch
of a new five-year bond.
Few expect Germany's top court court to rule the bailout
fund unconstitutional -- an outcome that would torpedo latest
attempts to fix the region's debt crisis -- but some think the
judges could attach tough conditions on any future German
"In these markets we might see a knee-jerk selloff after
they give it the OK, but how long that lasts, I don't know. It's
all about the conditionality," a trader said.
Bund futures were 22 ticks lower at 140.16 shortly
after the open. Commerzbank strategists saw potential for the
contract to fall 50-100 ticks if the court rules in favour of
the bailout fund.
In addition to the launch of Germany's new October 2017 bond
, investors will be watching Dutch elections to
gauge the likelihood of the country forming a government that
will remain committed to austerity targets.