EURO GOVT-Bunds up as no Irish deal seen imminently

LONDON, Nov 17 (BestGrowthStock) – German government bonds opened
higher on Wednesday with no immediate solution for Ireland’s
debt crisis in sight set to weigh on peripheral euro zone
issuers.

A fall in U.S. Treasury yields, compared with the European
settlement, also supported core bonds after U.S. Federal Reserve
officials on Tuesday fought back against a stream of criticism
over its $600 billion economic stimulus [ID:nN17168430].

While euro zone finance ministers agreed to lay the
groundwork for bailing out Ireland’s banking sector with the
International Monetary Fund, Dublin has yet to decide whether to
request the aid [ID:nLDE6AE2AI].

But neither requesting aid nor ruling it out completely is
likely to add to uncertainty on financial markets with fears
that contagion, already pushing Portugal’s borrowing costs
shaprly higher, will spread to Spain.

“We may get a banking deal but not anything other than that
for now,” a trader said.

“You have to think the market is going to go after all of
the periphery, trying to force them into a bailout, which should
support Bunds.”

At 0704 GMT, December Bund futures (FGBLZ0: ) were 20 ticks
higher at 128.34, bouncing off 3-1/2 month lows.

Two-year bond yields (DE2YT=TWEB: ) were down half a basis
point at 1.058 percent, with 10-year yields (DE10YT=TWEB: ) down
1.5 bps at 2.612 percent.

Euro zone finance ministers also told Greece to cut its
spending more [ID:nLDE6AF2F8] after Austria said Greece had not
fulfilled commitments for its EU aid package, warning that
Vienna had not yet submitted its contribution for December.

EURO GOVT-Bunds up as no Irish deal seen imminently