EURO GOVT-Bunds rise with U.S. Treasuries; supply, data eyed

LONDON, Dec 14 (BestGrowthStock) – Bund futures rose on Tuesday, in
line with a U.S. Treasury-led recovery overnight, and ahead of
data and debt supply that will help gauge investor sentiment
towards the region’s core and higher-yielding issuers.

At 0705 GMT, the Bund future (FGBLc1: ) was at 124.94, 37
ticks up on the settlement close but in line with levels seen
late trading.

After the European settlement, U.S. Treasury futures (TYv1: )
recovered sharply, triggered by a Federal Reserve buyback that
brought investors back into the market. [US/]

The outperformance by U.S. debt narrowed the gap in yield
between Treasuries and Bunds with 10-year U.S. T-notes last
yielding 34 bps more than German debt. The spread had topped 40
basis points in the previous session.

Survey data from the ZEW think tank will provide insight
into the morale among German investors, with a Reuters consensus
of analysts’ forecasts for the headline numbers showing an
improvement in sentiment and current conditions in December.

“We’re looking for a reasonable rebound, driven by the
current conditions. Given the selloff we’ve had in the last week
there’s more chance of a reaction if the figures come in on the
downside,” a trader said.

Investor sentiment towards those euro zone states struggling
with budget and banking sector problems will be gauged at a
Spanish auction of 12- and 18-month bills which comes ahead of a
longer-term debt sale on Thursday.

Officials at the U.S. Federal Reserve meeting later in the
day are expected to assess its latest $600 billion bond-buying
programme but not signal any shift in its buying intentions,
even though a planned extension of tax cuts could provide a
boost to the economy. [nFEDAHEAD]

“We’re looking for any clues on what they’re thinking on the
bond buying programme… to see whether they’re going to go
through with it all or not,” the trader added.

The 10-year German bond yield (DE10YT=TWEB: ) was 2.949
percent, down 2.3 basis points while the two-year Schatz yield
(DE2YT=TWEB: ) was 1.4 basis points higher at 1.08 percent.

(Reporting by William James; editing by Patrick Graham)

EURO GOVT-Bunds rise with U.S. Treasuries; supply, data eyed