EURO GOVT-German Bunds bounce off one-month lows

LONDON Mon Jan 7, 2013 2:12am EST

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LONDON Jan 7 (Reuters) - German Bunds edged up on Monday, with a fall to one-month lows last week prompting some investors to buy back the cheapened paper and wait for further proof the world economy was recovering.

Figures showing on Friday the U.S. services sector grew in December at its fastest pace in 10 months added momentum to a sell-off in German bonds last week that was sparked by a last-minute budget deal to avert a U.S. fiscal crisis.

At 0704 GMT, Bund futures were 18 ticks higher at 142.93, having fallen by almost three full points last week to a one-month low of 142.75.

"Further losses cannot be ruled out ... although temporary counter movements are possible given the major losses of recent days," strategists at Helaba Landesbank Hessen-Thueringen said in a note.

"We expect sideways trading around 143.00 initially."

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