* Investors reluctant to place big bets before ECB meeting
* Also sidelined before holiday in Europe, Fed, payrolls
* Italian, Spanish debt little changed after rally
By Ana Nicolaci da Costa
LONDON, April 30 Euro zone debt prices were
little changed on Tuesday with investors reluctant to place big
bets before central bank policy meetings and a run of economic
German Bunds have rallied in recent weeks on expectations of
further monetary easing by the European Central Bank, which a
narrow majority of economists expect to cut interest rates on
Bund futures were 6 ticks lower at 146.60, leaving them not
far from the 146.89 record high, which analysts say makes them
vulnerable to selling. Trade was expected to be relatively quiet
before a holiday in much of Europe on Wednesday.
Euro zone inflation data is expected to support the case for
a rate cut after German annual inflation eased to its lowest
level in more than two years in April.
"We are a bit skeptical that we will keep these (Bund
future) levels going into the ECB meeting. We would rather look
for a correction but not today, just starting on Thursday,"
Rainer Guntermann, strategist at Commerzbank said. He said a 25
basis point rate cut was priced in.
But market players were broadly in agreement that a 25 basis
point cut by the ECB would do little to spur growth in an
already ultra-loose monetary policy environment.
Investors also refrained from taking big positions before a
two-day Federal Reserve meeting which ends on Wednesday, and
U.S. jobs data on Friday.
Italian and Spanish government bond yields were little
changed after bond prices rallied in the previous session when
Italy clinched a new government after months of deadlock.
"Despite the fact that the periphery is doing well, we are
not really trading off it," one trader said.
The trader expected Cyprus's parliament to approve a bailout
imposed by its EU partners without any hiccups, but some
analysts were nervous about it.
"An accident would be no majority for the bailout package,
refusal of the bailout package. It's not the base but it is a
risk which is probably a bit underestimated at the moment,"