LONDON Oct 8 Bund futures rose on Monday after
a sharp sell-off in the previous session as u ncertainty over the
timing of a Spanish bailout request dominated sentiment and
little progress was expected from a meeting of euro zone finance
ministers later on.
Euro zone finance ministers will formally launch the euro
zone's permanent, 500-billion-euro bailout fund on Monday, and
will also discuss an expected request by the Spanish government
for a precautionary credit line from the ESM.
Expectations that Spain will ask for aid, which would likely
trigger the European Central Bank's bond-buying program, has
taken yields on Spanish bonds sharply lower but analysts say for
them to remain low, action is necessary.
"The guessing game will continue but the market will
increasingly realise that at the end of the day there will be
more debt mutualisation coming through so we think Bunds remain
vulnerable despite the sell-off we have seen on Friday after the
payrolls," Rainer Guntermann, strategist at Commerzbank said.
German Bund futures were 42 ticks higher at the
open at 141.27, having fallen 80 ticks on Friday as a surprise
drop in U.S. unemployment underpinned appetite for riskier
"If anything our strategy recommendation would be to sell
into strength," Guntermann said, adding there was support around