LONDON, June 19 German and Italian bond futures
rose on Thursday after the U.S. Federal Reserve struck a more
dovish stance on monetary policy than some had expected.
Longer-dated euro zone bonds sold off earlier this week
after higher-than-expected U.S. consumer price pressures led
investors to brace for the possibility that the Fed might be
open to raising interest rates sooner than many in the market
had previously thought.
But the Fed didn't note any inflation concerns after its
policy meeting on Wednesday, and it affirmed its commitment to
retaining accommodative monetary policy.
German Bund futures rose 30 ticks to 145.77 while
Italian BTP futures were 51 ticks higher at 125.46.
Euro zone bonds were also supported by the European Central
Bank's recent interest rate cuts and liquidity measures.
The overnight bank-to-bank Eonia lending rate fixed at 0.015
percent on Wednesday, the latest in a series of record lows
after the ECB stopped a weekly deposit tender to neutralise the
effect of the bond purchases it made at the height of the debt
crisis, injecting tens of billions of euros into the market.
(Reporting by Emelia Sithole-Matarise; Editing by Hugh Lawson)