LONDON, June 18 German Bund futures dipped on
Tuesday in line with U.S. Treasuries on expectations the Federal
Reserve may signal it is moving closer to trimming its bond
purchases at its meeting this week.
Concern the Fed could start reducing stimulus which has been
a major driver of stock market gains since last year has shaken
financial markets, driving lower-rated euro zone bond yields
away from multi-year lows and German yields to their highest in
Markets have stabilised somewhat, however, since U.S. data
on Friday came in weaker than expected.
At 0502 GMT, Bund futures were 22 ticks lower on
the day at 143.56. Bunds often move in tandem with their U.S.
counterparts due to their safe haven status.
"There's talk about the Fed tapering (down asset
purchases)," said one trader. "(Overall) the market is now
positioned for hopes that they might not be as aggressive as
feared, but conviction is very low."
Markets will watch the release of Germany's ZEW business
sentiment survey at 0900 GMT, but any market reaction is likely
to be limited before Fed's announcement late on Wednesday.