June 19, 2013 / 10:57 AM / 5 years ago

EURO GOVT-Bunds rangebound as investors await Fed

* German Bunds rise in tight ranges before Fed

* Lower-rated euro debt also little changed

* Fed seen leaving door open for data-dependent tapering

By Ana Nicolaci da Costa

LONDON, June 19 (Reuters) - German Bund futures rose in thin trade on Wednesday but kept to narrow ranges with investors reluctant to take big bets before the outcome of a two-day U.S. monetary policy meeting.

Comments by Federal Reserve Chairman Ben Bernanke last month fired up speculation the U.S. central bank could soon curb its asset buying, hurting equity and bond markets.

He is expected to announce later on Wednesday the Fed will keep buying bonds at a monthly pace of $85 billion while holding their options open to scale back the programme later this year if the U.S. labour market continues to improve..

“Everyone is a bit cautious given there is not only uncertainty to what Bernanke is going to say... but also how the market will interpret any comments,” Michael Leister, senior interest rate strategist, at Commerzbank said.

German Bund futures rose 34 ticks on the day to 143.55, having seen their biggest daily loss since late May in the previous session.

A 4 billion euro sale of 10-year German debt had little market impact. It attracted bids worth 1.5 times the amount on offer, slightly less than 1.6 at an auction in May.

Peter Schaffrik, head of European rates strategy at RBC Capital Markets, said there was scope for German yields to rise if the Fed only reiterated what he said on May 22.

Ten-year German bonds last yielded 1.55 percent, up around 40 basis points since the beginning of May, mirroring an above 50 bps rise in equivalent U.S. Treasury yields over the same period.

Lower-rated euro zone debt was also rangebound. Ten-year Spanish yields were flat at 4.56 percent and the Italian equivalent was 1.8 bps higher at 4.31 percent.

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