EURO GOVT-Bunds slightly down, eyes on German auction
LONDON Jan 9 (Reuters) - German Bund futures eased on Wednesday as European stocks were poised for a higher open thanks to an upbeat start to the U.S. earnings season, but analysts saw further room for a Bund recovery.
Debt investors braced for an auction of 5 billion euros of five-year German bonds which analysts expected to see decent demand thanks to a rise in five-year yields since the start of the year.
German Bund futures were 10 ticks lower at 143.33 but analysts saw room for a rise after the contract posted its biggest weekly loss since September last week.
"There were oversold conditions for the Bund market and the market should again become more neutral. When it is oversold there is a tendency for the market to move slightly higher," said Piet Lammens, strategist at KBC, adding there was key resistance for the Bund first at 143.75 and then at 143.92.
"If we would move sustainably beyond these two levels the picture might become more bullish for the Bund."
European stock index futures pointed to a slightly higher open after the largest U.S. aluminium producer, Alcoa, beat market expectations with its quarterly revenues.