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EURO GOVT-Dovish Fed officials lift Bund before auction
May 22, 2013 / 6:11 AM / 4 years ago

EURO GOVT-Dovish Fed officials lift Bund before auction

LONDON, May 22 (Reuters) - Bund futures rose on Wednesday, tracking higher U.S. Treasuries overnight, as U.S. Federal Reserve officials struck a dovish tone on the economy before the market receives new insight into the central bank’s thinking.

Investors will examine Fed Chairman Ben Bernanke’s testimony and minutes from the Fed’s latest meeting later on Wednesday for clues on when it might stop its ultra-loose monetary policy.

Two senior Fed officials on Tuesday dampened speculation this might happen soon, playing down chances that the U.S. central bank would signal a readiness to reduce its bond buying at its meeting next month.

German Bund futures were 24 ticks higher at 144.57 but gains were seen limited before the issuance of a new 10-year Bund later this session.

“At the end of the day it’s all about Bernanke today,” one trader said.

He said a recent rise in 10-year German yields should favour the auction: “Down at these levels we are seeing a bit of buying as we head to 1.40 (percent).”

German yields were 2.4 bps lower at 1.39 percent.

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