EURO GOVT-Bunds slip as global growth outlook lifts equities

LONDON, Dec 23 (BestGrowthStock) – Bund futures opened marginally
lower on Thursday as markets pointed to improved risk appetite
into the year end with European stocks seen extending their
December rally on an improved outlook for global growth.

At 0705 GMT, the Bund future (FGBLc1: ) was 5 ticks lower at
125.42. The 10-year German bond yield (DE10YT=TWEB: ) was 2.959
percent, flat on the day while the two-year Schatz yield
(DE2YT=TWEB: ) was also flat at 0.959 percent.

Yields at the short-end of the German curve could be
sensitive to bank demand for European Central bank funds at
today’s 13-day loan offering, as 200 billion euros of long-term
ECB fund expire. A surprisingly strong take-up at Wednesday’s
three-month ECB tender saw two-year bond outperform.

“I believe that the market will put its focus on ECB’s
liquidity operations. However, as I doubt that there will be any
significant drain in liquidity I don’t expect a major market
reaction,” said Niels From, chief analyst at Nordea in
Copenhagen.

Continued strong demand would confirm a large liquidity
surplus in the interbank market into the new year, and should
keep short-dated rates pinned down.

There was more bad credit ratings news for the euro zone as
rating agency Standard and Poor’s lowered its outlook for
Slovenia’s foreign currency (Read more about trading foreign currency. credit to negative late on
Wednesday. [ID:nN22109688]

A string of negative ratings actions in recent weeks have
kept investors wary of taking on debt from the euro zone’s
higher yielding states.

(Reporting by William James; Editing by Toby Chopra)

EURO GOVT-Bunds slip as global growth outlook lifts equities