EURO GOVT-Bunds lower; Greece, Portugal set to suffer more

LONDON, March 30 (Reuters) – Bund futures opened lower on
Wednesday, tracking losses in U.S. Treasuries after a Federal
Reserve official said it should trim its bond-buying campaign,
encouraging expectations of broadly tighter monetary policy.
At 0611 GMT, Bund futures (FGBLc1: Quote, Profile, Research) were 28 ticks lower at
121.22. Treasuries fell in the U.S. session on hawkish Federal
Reserve statements and a poor five-year note sale. [US/]

Portuguese and Greek bonds also looked set to remain
pressured after a new round of rating downgrades.[ID:nLDE72S1LY]

“Fed was hawkish and that is weighing on Bunds as well, it’s
reminding people the ECB (European Central Bank) is going to
hike next week,” one trader said.

Another trader said higher risk appetite suggested by rising
stock markets [.EU] was also weighing on Bunds, while it would
not help Greek, Portuguese and Irish government bonds.

“We’re going to have the Irish stress tests on Thursday and
there’s going to be speculation about that as well,” the second
trader said.

Italy auctions 3.4-4.5 billion euros of a new three-year BTP
and reopens auctions of 2.5-3.25 billion euros ten-year BPTs and
1-1.5 billion euros of a 2017 CCTeu (Euribor-linked floating
rate bond).

The sale is expected to be well bid due to solid domestic
demand and as Italy and Spain have recently decoupled from
troubled markets in Portugal, Greece and Ireland.
(Reporting by Marius Zaharia; Editing by Patrick Graham)

EURO GOVT-Bunds lower; Greece, Portugal set to suffer more