German Bunds are trading lower Tuesday, although off the lows, having been unable to hold on to early session gains. The September Bund contract traded to an early session high at 142.95, helped by ongoing concerns for the Spanish banking sector, as press reports suggested the audit report on banks will not be released until September. However, German debt futures were unable to hold gains and turned lower, with downside accelerating in the wake of Spain managing to successfully get away just over E3 billion in 12 and 18-month bills, albeit at heightened yields. Bunds did bounce off the lows on a weaker than expected ZEW survey, which saw a headline reading of -16.9, but were sill last lower on the day. Traders said flows remained light and largely hot money, with few real money players prepared to get involved ahead of the 2-day FOMC meet.
EasyForexNews Research Team