LONDON Feb 26 German Bund futures jumped to a
two-month high on Tuesday while equivalent Italian futures
tumbled as an indecisive Italian election fuelled fears of
political instability in the euro zone's third biggest economy.
Higher-yielding euro zone bonds were seen under selling
pressure as Italy faced political deadlock after a huge protest
vote left no group with a clear majority in parliament.
"It's just not a great outcome (in Italy's election) at all,
so risk-off should be the theme. I can't see any reason why we
shouldn't trade that way especially given that there are fairly
significant longs in the periphery compared to where we were a
few months ago," a trader said.
The German Bund future was last 113 ticks up at
144.65 compared with 143.52 at Monday's settlement, while
Italian BTP futures were 353 ticks down at 108.97.