German government bonds trading lower Monday amid-risk-on trades following news that the Greek parliament late Sunday approved an extremely unpopular package of extra austerity measures. However, uncertainties remain as it is still unclear whether that will be enough in and of itself to secure their approval for the new bailout at an upcoming Eurogroup meeting scheduled for Wednesday. In addition, markets also await the troika’s presentation of their report on their assessment of Greece’s debt sustainability, along with the outcome of the PSI deal, which is considered necessary if Greece is to secure its second bailout fund for E130bln. Once this is done, eurozone parliaments are then scheduled to vote to sign off on the loan before it can be paid out. In supply news, Italy sold a combined E12.0bln of a new 12-mth and a new “Flexi” BOT at lower yields, but demand was lower for 12-mth BOT, which the Bank of Italy said had “technical problems”. Germany sold E3.01bln new 6-month Bubill at avg yield 0.0761% versus -0.0122% previous sale and bid-to-cover ratio of 1.5 versus 1.8 previous.
EasyForexNews Research Team