LONDON, March 28 German government bond futures
rose on Thursday with investors' attention focused on Cyprus
where banks open for the first time in nearly two weeks, facing
fears of a run on deposits with wider implications.
Cyprus's rescue plan is the first in the euro zone to
impose losses on bank depositors and has prompted Cypriot
authorities to impose strict controls on the amount of cash that
can leave the island state.
The risk that depositors in other countries could take
fright at any sign of long queues at Cypriot banks and start
withdrawing their own cash kept demand for low-risk German debt
high, although analysts said a cross-border bank run was not
German Bund futures rose 11 ticks to 145.63, within
sight of the March 4 high of 145.80. Any break above that level
would see Bunds at their highest since late December. Ten-year
Bund yields were 0.5 basis points lower on the day
at 1.27 percent.
"We see further downside in Bund yields as investors will
keep risks light and opt for safety ahead of the Easter break,"
Commerzbank strategists said in a note.