EURO GOVT-Bunds bounce back as markets brace for Spanish supply

LONDON Oct 18 (Reuters) - German Bund futures rebounded on Thursday, having fallen sharply in the previous session, as investors prepared for a bout of supply from Spain later in the day.

German Bund futures erased early losses to stand up 13 ticks on the day at 139.88. It saw its biggest one-day loss in more than a month in the previous session when Moody's defied market expectations and affirmed Spain's investment grade rating.

"It's probably a small reversal around supply from yesterday's move," one trader said.

Spain sells up to 4.5 billion euros of three-, four- and 10-year paper.