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EURO GOVT-Bunds fall after Greek lenders seal debt deal
November 27, 2012 / 7:10 AM / 5 years ago

EURO GOVT-Bunds fall after Greek lenders seal debt deal

LONDON, Nov 27 (Reuters) - German Bund futures fell at Tuesday’s open after Greece’s international lenders agreed a package of measures to cut the country’s debt, paving the way for the release of more aid.

The accord, reached by the lenders in their third meeting in as many weeks, will cut Greek debt by 40 billion euros to bring it to 120 percent of gross domestic product by 2020.

Eurogroup chairman Jean-Claude Juncker said euro zone ministers would formally approve the release of aid to Greece, removing uncertainty over whether Athens could avoid near-term bankruptcy. The relief provided a lift for riskier assets such as equities to the detriment of safe-haven government bonds.

The German Bund future was last 30 ticks down at 142.13 compared with 142.43 at Monday’s settlement but traders said the losses were likely to be limited as the deal was already largely priced in.

“We will see a bit of pressure on Bunds but not that much as the market was already discounting a deal,” a trader said.

“The market is very short and people are looking at Spain which looks like it’s not going to make an aid request until next year so we are likely to remain range-bound.”

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