German government bonds are opening lower Thursday on profit-taking and also ahead of heavy slew of supply this morning from France and Spain for up to E13.5bln. Whilst the market will be focused on the Spanish bond auction, the French auctions have potential to upset, which come at a tricky time ahead of 1st round presidential elections this weekend. In other supply, the UK Debt Management Office (DMO) is due to tap the 0.25% Mar 2029 IL Gilt issue for Stg1.25bln and the US sells $16bln 5-year TIPS. Elsewhere, Dutch bonds also risk underperforming after Fitch issued its “cleanest warning” that the Netherlands could lose its AAA rating, according to the Telegraph. The paper quotes a Fitch analyst saying “the Dutch are on the edge of a negative rating action,” with a outlook downgrade to negative likely first. Fitch told the paper the rating committee would meet in June. S&P has already put the Netherlands AAA rating on negative outlook earlier this year. Also eyed are quarterly earnings from Morgan Stanley, Bank of America & Microsoft, which are amongst the biggest names to report.
EasyForexNews Research Team