German government bonds are opening mixed with the 10-year area weighed ahead of the launch of France’s new 10-year benchmark OAT bond, in turn steepening the yield curve. Mar Bund futures contract put in a bearish engulfing pattern, and with sentiment weighed by market rumours suggesting a conclusion to the Greek debt talks. Unconfirmed market rumours later in the session suggested that a Greek deal had been reached with chatter of a 72% haircut, 3.6% coupon, a GDP warrant and no ECB/NCB participation. However, the Institute of International Finance (IIF) issued a statement late Wednesday downplaying news reports of significant progress in debt talks between private creditors and the Greek government, adding that “constructive discussions continue on the voluntary debt exchange as other matters move forward. We hope that the various elements of the Greek package will come together in the days ahead”, added the statement. Attention remains on the ongoing Greek PSI talks, and also supply from France, Spain and the UK.
EasyForexNews Research Team