German government bonds are opening lower Thursday, with yield curve extending its steepening move ahead of a heavy supply from France for up to E8.0bln. However, whilst the benchmark 10-year Bund holds below 2.00% yield, the outlook remains constructive given the ongoing eurozone sovereign debt crisis, which isn’t showing any signs of ending any time soon. Spanish yield spreads widened yesterday following story that Spain may request EU, IMF loans in order to help finance its banks, according to Expansion, which cites unidentified sources. Whilst this story was denied by the Spanish government, the markets will take note of FT story today, which says banks are required to put aside an additional E50.0bln in provisions against bad property assets. Attention now turns to the Spanish government press conference at 1300GMT following cabinet meeting, where Rajoy’s government is expected to announce plans “to restructure the central government administration and rationalise state companies”, according to the FT. Also eyed today is US ADP private payrolls data ahead of the key US payrolls number Friday.
EasyForexNews Research Team