December 6, 2012 / 7:26 AM / 5 years ago

EURO GOVT-Bunds stable on U.S. budget impasse; ECB eyed

LONDON, Dec 6 (Reuters) - German Bund futures steadied on Thursday with the lack of a break-through in U.S. budget talk underpinning low risk debt before from a European Central Bank policy meeting later in the day.

The ECB is likely to keep interest rates on hold on Thursday but may offer clues on its policy path for next year with updated forecasts likely to present a grim outlook for the euro zone economy in 2013..

“The market will be looking for signs in terms of (ECB) policy responses in early 2013,” a trader said.

German Bund futures were up 5 ticks on the day at 143.33.

Financial markets have been sensitive to any comments on progress of U.S. talks to avert a fiscal crisis and U.S. Treasuries firmed in Asian trading with little signs of progress in Congressional talks on Wednesday.

Before the ECB meeting, investors were expected to easily take up 3 to 4 billion euros of French supply. The bonds have generally benefited from investors seeking some pick-up over Germany whose yields are at ultra-low levels.

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