LONDON Dec 13 German debt futures fell at
Thursday's open, tracking a decline in U.S. bonds sparked by the
announcement of fresh stimulus by the Federal Reserve that,
although anticipated, dented demand for safe haven assets.
The Fed said it will buy $45 billion in Treasuries each
month and will expand its purchases to five-year notes from the
current seven-, 10- and 30-year bonds.
The Fed also took the unprecedented step of saying it would
keep interest rates near zero until the jobless rate falls to
6.5 percent, well below its current level, so long as inflation
"Perhaps there's some mild disappointment that they've
shifted the maturities of what they're buying and dropped the
'rates low forever' language and are looking at it more
qualitatively," a trader said.
Bund futures slipped 27 ticks to 144.99, a less
severe fall than that seen in U.S. debt futures which
were trading around half a point lower compared to levels before
the Fed announcement.
Focus during the European session will be on debt sales
from peripheral states Italy and Spain. Both were expected to
find demand but the strength of bidding will be closely watched
for clues on how willing investors will be to support the
debt-laden sovereigns in 2013.