November 7, 2012 / 11:16 AM / 5 years ago

EURO GOVT-German auction clears way for fresh Bund rise

LONDON, Nov 7 (Reuters) - German Bund futures rallied to a session high on Wednesday after the completion of a bond auction gave renewed impetus to a rally in government debt sparked by the re-election of Barack Obama as U.S. President.

Following a 3.3 billion euro five-year German bond sale the December Bund futures contract hit a peak of 142.41, up 32 ticks on the day and well above the low of 141.77 seen in early trade.

“There’s been a few buyers of the dips and decent buying of five-year futures after the auction, as well as some extension trades as two-year yields turn negative again,” a trader said.

“The market had priced out a lot of quantitative easing (in the U.S.) and now it’s being fully priced back in, that’s very supportive and Bunds will follow that.”

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