* EU finance ministers unlikely to OK Greek aid release
* Euro zone GDP growth data to confirm slowdown
* Bund yields could fall to 1.3 percent
By Emelia Sithole-Matarise
LONDON, Nov 12 German Bund futures edged higher
on Monday, underpinned by uncertainty over the outcome of Greek
aid talks and worries about a potential fiscal crisis in the
With most U.S. markets shut for a holiday, investors focused
on a euro zone finance ministers' meeting later on Monday which
will discuss whether to release a new tranche of funding to
debt-plagued Greece after it approved a tough 2013 budget on
German Finance Minister Wolfgang Schaeuble told a German
newspaper on Sunday that the troika of international lenders to
Athens was unlikely to deliver its full report in time for the
Bunds were expected to remain in demand after officials said
the euro zone was unlikely to release the new funding as there
was no agreement on how to make Greece's debt sustainable,
though Athens is set to get two more years to cut it.
"I don't think we are going to get anything concrete (from
the finance ministers) in terms of the next Greek aid tranche,"
a trader said.
"The market is pretty constructive as long as the global
economic backdrop remains uncertain given the U.S. fiscal cliff.
I don't see why Bunds should trade off particularly."
The Bund future was last at 143.20, up 6 ticks from
Friday's settlement and near its highest in over two months,
which it reached last week as renewed concern over Greece and
global growth spurred demand for safe-haven government debt.
Time pressure for a deal on Greece is growing because Athens
has to redeem 5 billion euros worth of treasury bills on Nov. 16
and had been counting on cash from the next aid tranche to help
cover that. That has left Athens mulling rolling over the bills.
"Greek will by hook or crook get the money for the
redemptions but beyond that I don't think the next aid tranche
payment will come before the end of November," another trader
German 10-year yields were steady at 1.34 percent
. Some strategists said they could fall as low as
1.3 percent in coming days with gross domestic product data from
Germany, France and Italy this week widely expected to confirm a
slowdown in euro zone growth.
Investors also remain concerned that spending cuts and tax
increases due to kick in early in 2013 could derail the U.S.
recovery if Democrats and Republicans in Congress fail to reach
a deal before the end of the year.
"Whilst there's uncertainty remaining on Greece and the
U.S., core government bonds will remain underpinned but I think
10-year Bunds at these levels look pretty rich," Nick
Stamenkovic, strategist at RIA Capital Markets, said.
"Near term we could see Bund yields test the 1.30 level but
at those sort of levels investors will be reluctant to push the
yield significantly lower unless we see signs of significant
disagreement in the U.S. and/or problems with financing in