German government bonds are opening firmer Thursday, amid China and North Korea jitters, combined with uncertainty about the size of the eurozone bailout fund. Focus remains on Spain where a general strike is planned today ahead of PM Mariano Rajoy 2012 budget presentation on Friday. Spain 10-year yield is at 5.32% having risen to 5.52% last week – highest level since Jan 11, 2012. Recent story that Spain will have to eventually tap the EU’s bail-out fund to help restructure its banking system, continues to dominate sentiment, despite denials from both the Spanish government and also the EU Commission. The key focus today is on Italy’s end-of-month auctions, where the Dipartimento del Tesoro taps its 4.75% May 2017 BTP for between E1.75bln to E2.5bln, tap of the 10-year benchmark 5.50% Sep 2022 BTP for between E2.25bln to E3.25bln and also a new 7-year floater June 2017 CCTeu for between E2.0bln to E2.5bln indicative size. US sells $29.0bln 7-year Notes. Also eyed today are a heavy slew of central bank spreakers, which includes Fed’s Lockhart (voter), Plosser (non-voter), Lacker (voter) and Bernanke.
EasyForexNews Research Team