Bunds flat as investors brace for auction

Bund futures were steady on Wednesday as investors refrained from putting on big bets before a German debt auction this session and a European Central Bank policy meeting on Thursday.

Germany kicks off the week’s issuance with a 4 billion euro sale of five-year bonds later, which analysts expect will attract demand from investors still fretting about Cyprus’s messy bailout experience.

“We look for decent demand with markets eyeing a softer ECB this week and see value against (surrounding bonds),» Commerzbank strategists said in a research note.

German Bund futures were flat at 145.24.

The ECB is widely expected to hold off on an interest rate cut this month at its meeting on Thursday but to try to calm investors worried about the euro zone crisis flaring up again.

“We are waiting for Thursday. We are looking for a dovish tone without anything officially changing,» one trader said.

Investors would also keep an eye on U.S. private sector jobs numbers due later this session, before a key monthly U.S. non-farm payrolls report on Friday.


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