LONDON Dec 19 German Bund futures fell on
Wednesday, extending recent losses, as growing expectations that
U.S. lawmakers will manage to avert a fiscal crisis favored
riskier stocks at the expense of safe-haven debt.
U.S. stocks rallied on Tuesday and Asian equities advanced
also in anticipation of more aggressive monetary stimulus from
the Bank of Japan.
Hopes of an accord rose this week after U.S. President
Barack Obama made a concession with his offer to limit tax
increases to incomes exceeding $400,000 per household - a higher
threshold than the $250,000 he had sought earlier.
German Bund futures were last 21 ticks lower at
In the case of a deal, Bunds would "knee-jerk down but I
don't see why we are going to collapse on it. I don't think
that's the only reason Bunds have been reasonably well-bid
recently," a trader said.
"The growth outlook in Europe looks awful and those
forecasts are presumably based on the fiscal cliff getting
Investors will get the latest insight into the health of the
region's biggest economy from German business morale numbers due
later in the day.
But the trader warned against reading too much into the
price moves, with liquidity thinning out as the Christmas
holidays and end of the year approach.
"Everyone is shut for the year. People have got their books
how they want, there is very little going on," he added.