LONDON Jan 2 German Bunds fell on Wednesday
after U.S. lawmakers approved a deal preventing massive tax
hikes and spending cuts that would have dragged the world's
largest economy into recession.
The Republican-controlled House of Representatives approved
a bill that will raise taxes on top U.S. earners, fulfilling
President Barack Obama's re-election pledge and avoiding a
'fiscal cliff' of $600 billion in broad-based tax hikes and
"The compromise is supportive for risk sentiment as we've
seen in a few markets already and it should weigh on Bunds which
should correct in line with Treasuries. Treasuries could even
underperform," said Rainer Guntermann, a strategist at
"But we also have the follow-up debate on the (U.S.) debt
ceiling which we are bumping into in February and this will be
another debate for the next few weeks which could possibly be
supportive for Bunds but for now Bunds are set to correct a bit
lower from their run over the festive season."
The Bund future was last 89 ticks down at 144.75
compared with 145.64 at Monday's close. European markets were
shut for New Year's Day on Tuesday.