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LONDON, July 14 German Bund futures hitsession
highs on Thursday as Italian and Spanish government debt came
under pressure with a successful BTP auction failing to change
market view that bigger peripheral euro zone states are being
sucked further into the debt crisis.
Italian 10-year government bond yields rose 18
basis points on the day to 5.75 percent, pushing their spread
over benchmark German Bunds out 12 bps to 305 bps.
The spread had been under 300 bps just after Italy sold
almost 3 billion euros in five- and 15-year bonds. Spanish
yields rose 14 bps to 5.98 percent.
"The Italian auction was well covered but at a price...A bad
auction would have seen a much sharper selloff but a good
auction does little to allieviate what is really the heart of
the matter," said Richard McGuire, strategist at Rabobank in
German Bund futures jumped as much as 52 ticks on the day to
a session high of 128.87. It last traded up 34 ticks at 128.69.
(Reporting by Emelia Sithole-Matarise and William James)