November 5, 2012 / 7:21 AM / in 5 years

EURO GOVT-Bunds rise as U.S. and Greek votes fuel bid for safety

LONDON, Nov 5 (Reuters) - German Bunds rose to a two-month high on Monday as low-risk assets gained favour at the start of a week in which the United States elects a new president and Greece faces another make-or-break parliamentary vote.

Trading was expected to be thin and dominated by a shift into safe-havens before Tuesday’s U.S. presidential election which could change the direction of fiscal and monetary policy in the world’s largest economy.

Closer to home, Greece’s government presents an unpopular austerity package to parliament on Monday which must gain approval in a vote on Wednesday to unlock an international aid payment and stave off the threat of bankruptcy.

Bund futures, the low-risk asset of choice in the euro zone, were 22 ticks higher at 142.09, breaking the 142 technical barrier which has survived several tests over the past six weeks.

If the move above 142 is sustained at the market close, technical analysis showed prices could be set to rise further to test the December contract’s Aug 2 high of about 143.40.

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