RPT-EURO GOVT-Bunds up on worries over Greek debt rollover plan

(Repeats with table)

* Uncertainty over Greek debt rollover plan keeps Bunds bid

* Periphery bonds weaker, manufacturing surveys weigh

* Analysts note "bearish bias" before Thursday's ECB meeting

By Marius Zaharia

LONDON, July 5 (Reuters) - German Bunds rose on Tuesday,
with uncertainty surrounding plans to roll over Greek debt
offsetting a bearish bias before a likely European Central Bank
interest rate hike later in the week.

The ECB meeting on Thursday is growing in importance, with
investors not only waiting for clues on the pace of future
monetary tightening, but also hoping for more clarity on the
bank's stance on Greek collateral.

Monday's warnings by rating agency Standard & Poor's that a
proposed rollover of Greece's privately-held debt would
constitute a selective default sparked concerns that Greek banks
could face financing problems if the ECB rejects their
government paper in liquidity operations.

"There is this fear that if the Greek banking market falls
into disorder, this will also cause turmoil in the rest of
Europe," said Glenn Marci, rate strategist at DZ Bank.

"Even though generally Greece is due to be rescued, there
are still a lot of details to be clarified and markets are still
trying to gain certainty at the moment, and this will be a slow
process. The lesson we've learned is that things take more than
we think they should."

Bund futures FGBLc1 were last 15 ticks higher on the day
at 125.63. Benchmark 10-year yields were down 1.4
basis points at 3.007 percent, while the two-year Schatz yielded
1.651 percent, 1.8 bps lower on the day.

The Financial Times cited an unnamed financial sector source
on Tuesday as saying the ECB will accept Greek government bonds
as long as not all credit rating agencies rate them as having
defaulted.

"That's one of the stories that Mr. Trichet will have to
clarify at Thursday's meeting. Thursday may be more important
for the Bunds than (Friday's U.S.) non-farm payrolls this time,"
Marci said.

The U.S. jobs report on Friday will give investors fresh
insight into the state of the world's largest economy after
recent data showed the worst of a "soft patch" may be over.

Bonds issued by the euro zone's lower-rated states were
weaker. The Spanish/German 10-year yield spread
rose 8 bps on the day to 247 bps, while its
Italian peer widened by 6 bps to 196 bps.

Traders said surveys showing tepid growth in euro zone
manufacturing weighed on those bonds.

Greek two-year yields were 14 bps higher at
26.9 percent, while the cost to insure Greek bonds against
default rose 38 bps to 1,900 bps.

MORE IS LESS

The market has recently been reluctant to price more ECB
rate hikes this year beyond July due to uncertainty over how
contagious the Greek debt crisis is.

"They would hike and then they would go back to a more
neutral stance and then if they need to step things up they will
do it at the next meeting," one trader said.

However, risks are skewed for the ECB to signal more
tightening to come this year, with Credit Agricole strategist
Luca Jellinek saying there was an "underlying bearish bias,"
in the Bund market.

"The market is generally negative (on Bunds) but not enough
to trigger a downside at the moment," Marci said. "Probably only
after the ECB meeting we will see more downside in the market."

(Reporting by Marius Zaharia; Editing by Catherine Evans)