Safe-haven German bonds in favour as tight UK referendum kicks off

* Care as voting starts in UK mandate supports Bunds * 2 surveys released late Wednesday give “Remain” camp a.
lead * Volumes thin * Greece in focus as ECB takes Greek banks off emergency situation.
lifeline By Dhara Ranasinghe LONDON, June 23 A sense of caution as voting.
began in a tight referendum on the UK’s subscription of the.
European Union bolstered safe-haven German bonds on Thursday, as.
most current surveys showed a slight tilt towards those in favour of.
keeping Britain in the EU. Sterling rose to its strongest this year versus the dollar.
after 2 polls revealed a swing to “Stay” and betting.
market value in an 80 percent opportunity Britain would not vote to.
leave the EU.

As momentum moved towards the remain camp over the past.
week, danger appetite has actually gotten in global markets – benefiting.
lower-rated southern European debt at the expense of top-rated.
German bonds. European shares were broadly higher on Thursday. However with the vote too close to call, warn grasped bond.
investors, keeping Germany’s 10-year government bond yield, the.
benchmark for borrowing costs in the euro location, within 10 basis.
points of record lows hit recently. “We have a poster on our trading floor which reveals Bart.
Simpson writing never ever sell Bunds repeatedly,” said David.
Schnautz, interest rate strategist at Commerzbank, describing.
the cartoon character from the program, The Simpsons. “And on a day.
like this, you have to ask do you want to sell German bonds?” The German 10-year bond yield was down 2 basis points at.
0.05 percent, while 30-year bonds yields fell 3.
bps to 0.64 percent.

Goldman Sachs expects a “Remain” result to push German Bund.
yields up by around 10 bps, while a “Leave” vote might push.
yields to minus 0.01 percent. Other euro zone bond yields were 1-2 bps lower, in light.
trading volumes. Peter Chatwell, head of European rates technique at Mizuho,.
said federal government bond markets in Europe currently rate in a.
higher possibility of a stay vote.

He stated a vote in favour of leaving the EU could see the.
10-year yield gap between Italian and German bonds widen by 27.
bps and tighten by 15 bps if remain wins. The yield gap stands at around 151 bps, its tightest in more.
than a month. Peripheral bond markets are seen as particularly vulnerable to.
the political and economic fallout of a Brexit vote. Italy’s anti-establishment 5-Star Motion, buoyed by big.
gains in regional elections, has pushed needs for a mandate.
on whether to keep the euro, something that would add to a wave.
of plebiscites shaking politics across Europe. Elsewhere, Greece remained in focus after the European Central.
Bank restored Greek banks’ access to its low-cost financing.
operations on Wednesday after more than a year on an emergency situation.
lifeline. The ECB also stated it would examine later whether to.
add Greek debt to its asset purchases. For Reuters brand-new Live Markets blog on European and UK stock.
markets see reuters:// realtime/verb= Open/url= http://.
emea1.apps.cp.extranet.thomsonreuters.biz/ cms/? pageId= livemarket.
s.

( Reporting by Dhara Ranasinghe; Modifying by Toby Chopra).

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