LONDON, April 21 (Reuters) - The June Bund future rose 10 ticks on Wednesday, paring earlier losses after U.S. Federal Reserve Chairman Alan Greenspan soothed fears of an early interest rate rise.
In a testimony to the congressional Joint Economic Committee, Greenspan said the disinflation trend is likely to be over but there are no signs of broad inflation pressures.
This brought relief to the market which sold-off after Greenspan, testifying before the Senate Banking Committee on Tuesday, said the threat of U.S. deflation had ended, fuelling speculation of near-term interest rate hikes.
"Investors are taking on board the fact this speech from Greenspan is not as alarming as might have been feared following his comments on Tuesday when we saw Treasuries sell-off late in the session.," said a trader in London.
At 1409 GMT, the June Bund future was down 26 ticks on the day 114.03, but up from the 113.88 level seen before Greenspan started speaking.
"As I have noted previously, the federal funds rate must rise at some point to prevent pressures on price inflation from eventually emerging," Greenspan said in testimony prepared for Congress's Joint Economic Committee.
Euro debt-Futures rise after Greenspan speaks novo
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21-04-2004 07:21
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