LONDON, Nov 8 (Reuters) - German Bund futures held steady at the open on Thursday underpinned by investor concerns over a looming U.S. fiscal crisis but activity was seen subdued before a European Central Bank policy decision.
Traders were also focusing on a Spanish auction later in the day of 3.5 to 4.5 billion euros of bonds including a new 5-year bond and 20-year debt - the longest dated issue to be sold at an auction since mid-2011. The sale is expected to go smoothly after the the Greek parliament approved, as expected, austerity measures needed to unlock vital aid and avert bankruptcy.
“Until we get more news on this U.S. fiscal situation core markets are OK so we’ll probably buy Bunds on dips,” a trader said.
“But I don’t think there’s a huge position out there. We have the ECB and the Spanish auction to get through. As much as the ECB won’t do anything today you’ve got to think that given the way the data is going we’re certaintly looking for a rate cut before the end of the year.”
The Bund future was last one tick up at 142.76 compared with 142.75 at Wednesday’s settlement.