LONDON, April 7 German and Italian bond futures
rose in early trade on Monday as investors weighed up the
possibility that the European Central Bank could embark on a
programme of asset purchases this year to support the economy.
Bunds and the rest of the euro zone government bond market
rallied sharply on Friday after a German newspaper said the ECB
had modelled the effects of buying a trillion euros of assets to
ward off deflation.
This followed comments by ECB President Mario Draghi that
policymakers were unanimous that asset purchases, also known as
quantitative easing, might be needed to tackle persistently low
"After Friday's stories on QE, that remains the main
focus... At the moment periphery, especially now we have got
this QE talk, is massively supported. That's the most obvious
trade in town," a trader said.
Italian BTP futures were last 15 ticks up on the
day at 123.06 with Bund futures 14 ticks higher at
The market will also be watching out for a Greek debt sale
which might come as soon as this week, marking the country's
return to the market just two years after it defaulted.
Investors were likely to shrug off the lack of a statement
from Moody's on Friday, when it was scheduled to review Greece's
credit ratings to at least lift them up in line with Standard &
Poor's and Fitch.
(Reporting by Emelia Sithole-Matarise; Editing by Hugh Lawson)