German government bonds trading lower midday Wednesday amid optimism over a Greek debt/bailout deal. This optimism continues to dominate despite story that Germany’s Finance Minister Wolfgang Schaeuble is considering postponing the lion’s share of new Greece aid in order to keep pressure on Greek authorities to reform, according to the Financial Times Deutschland. According to the FTD report, the German finance minister wants to split the new bailout package into two parts. The first part, consisting of E30 billion earmarked for Greek banks that participate in the private sector debt reduction deal, could be released within days. Attention remains on developments of talks between the three coalition party leaders that resume today. Bunds were also weighed by supply, where Spain opened order books for its syndicated re-opening of its 10-year benchmark 5.85% Jan 2022 Obligacion, with guidance of +35bps mid-yield area vs 2021 Obligacion issue. Elsewhere, Germany alloted E3.293bln of 0.75% Feb 2017 Bobl 162 issue at an average yield of 0.91% versus 0.90% last and covered 1.8 time vs 2.8 previous.
EasyForexNews Research Team