January 23, 2013 / 7:20 AM / 5 years ago

EURO GOVT-Bund futures inch up as Portuguese debt sale eyed

LONDON, Jan 23 (Reuters) - German Bund futures edged higher at Wednesday’s open with traders citing technical factors after the contract failed to break below last week’s lows.

The small rebound in low-risk Bunds was, however, unlikely to gain momentum with investors still upbeat about higher-yielding euro zone bonds after a new 10-year Spanish bond drew robust demand, keeping up Madrid’s solid start to its 2013 fundraising.

The Bund future was last 11 ticks up at 143.23 compared with 143.12 at Tuesday’s settlement.

“There’s a lot of resistance around the 143.44-50 area and it’s going to be a major struggle to break through there at the moment,” a trader said.

In supply, focus will be on Portugal which is expected to reopen its October 2017 bond later in the day, according to a report by Thomson Reuters service IFR citing a bank managing the deal. The sale marks Portugal’s return to the bond market for the first time since its 2011 international rescue.

Portuguese 10-year yields broke below 6 percent for the first time in over two years on Tuesday after the report, with further traders expecting further falls once the sale was out of the way.

Comments from EU commissioner for economic affairs, Olli Rehn, that the commission will support Portugal’s return to the bond market added to investor confidence that the country could be on its way to exit its bailout due to expire at the end of this year.

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