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EURO GOVT-Bunds steady before U.S. election
November 6, 2012 / 7:10 AM / in 5 years

EURO GOVT-Bunds steady before U.S. election

LONDON, Nov 6 (Reuters) - German government bonds were steady at Tuesday’s open with investors avoiding placing large bets before a close-run U.S. election and a Greek parliamentary vote on crucial austerity measures.

Polls indicate the election between President Barack Obama and Republican challenger Mitt Romney will be very close with the risk of a change in fiscal and monetary policy in the world’s largest economy keeping investors on the sidelines .

December Bund futures were 2 ticks lower at 142.11 after rallying the previous day.

“Given today’s thin data calendar...the near-term downside should be protected ahead of U.S. elections and the vote in the Greek Parliament,” Commerzbank strategists said in a note.

Risk sentiment soured on Monday as another make-or-break vote loomed in Greece, pushing two-year German bond yields into negative territory for the first time in two months.

The Greek parliament will decide to approve or reject on Wednesday the government’s latest package of austerity measures with approval of the reforms and the passage of the 2013 budget crucial to receiving more bailout cash.

The renewed demand for lower-risk assets seen this week will be supportive for Austria’s sale of 1.3 billion euros of 2019 and 2022 bonds, analysts said.

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