July 29 (Reuters) – Bund futures opened higher on Thursday, lifted by concerns over the U.S. economy after weak data in the previous session, with a euro zone sentiment survey seen adding to safe-haven bids if it fails to meet expectations. The euro zone survey released at 0900 GMT is expected to show a small gain in economic sentiment, but could lend further support to Bunds if it falls below the forecast of 99.0.
“The risk is that it comes in below forecast and people start questioning the strength of the recovery,” a trader said.
On Wednesday, a Federal Reserve report showed lacklustre growth and U.S. durable goods orders unexpectedly fell.
“It feels like we might have seen the lows of the week. I think the market is looking for signs of (risk appetite) calming down,” the trader said.
At 0605 GMT, the Bund future FGBLc1 was 8 ticks up on Thursday’s settlement close at 127.89, although slightly below the official close after a rally in late trading.
The 10-year German bond yield DE10YT=TWEB was 2.742 percent, down around 1 basis point while the two-year Schatz yield DE2YT=TWEB was flat at 0.852 percent.
In supply, benchmark peripheral sovereign Italy will come to market with auctions of conventional and floating-rate bonds worth up to 9.5 billion euros.
Although recent warmer sentiment towards the euro zone’s higher-yielding countries has seen peripheral debt sales draw good demand, a trader said there was likely to be some attempt to cheapen the Italian paper further ahead of the auction. (Reporting by William James)