Bond futures contracts are mixed Wednesday

Bond futures contracts are mixed Wednesday as gilts again outperform their European counterparts ahead of the BOE's first reverse auction. Bunds opened lower as European equity markets took their lead from gains on Wall Street Tuesday. Supply pressures added to the negative tone. Germany's EUR8.0B 2-year Schatz auction was covered 2.1 times, before attention turned to the US Treasury's USD18.0B 10-year note auction later Wednesday.. At 1100 GMT, June bunds were down 0.62 at 123.87, within a 123.76-124.52 range. The June Euribor contract was up 0.015 at 98.48. Gilts hovered close to unchanged in cautious trading as the BOE's GBP2.0B buyback loomed. Full results of the operation are expected some time after 1445 GMT. At 1100 GMT, June gilts were up 0.11 at 124.10, within a 123.79-124.32 range. June short sterling was up 0.05 at 98.36. The forex market replayed Tuesday's trading pattern with the dollar giving up overnight gains as equities once again headed north. EUR/USD nudged higher throughout the session back to 1.2750 after falling to 1.2616 in Asia after China's trade balance suffered a dramatic deterioration with exports down 25.7% year-on-year. Sterling trade is cautious ahead of the first BOE QE gilt auction, the pound remains heavy against the euro but manages to add over one cent to $1.3820. Once again JPY is left on the sidelines with USD/JPY unchanged at 98.40. Elsewhere oil is holding just above $45bbl, DAX and CAC-40 are up 1%, FTSE 100 is down 0..4%, 3-month USD, euro and sterling libors fell.