RPT-Bunds fall, euro and bank stocks rise after LTRO payback

Fri Jan 25, 2013 6:14am EST

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LONDON Jan 25 (Reuters) - German debt prices fell while banking stocks and the euro rose on Friday after the ECB said banks planned to pay back 137 billion euros of its long term loans -- more than traders had expected.

Banks will repay the European Central Bank 137.159 billion euros in three-year loans next week, opting to hand back the money early, in a sign at least parts of the financial system are returning to health.

Bund futures fell around 20 ticks from levels seen before the announcement to a session low of 142.62 while two- year German yields extended an earlier rise to trade 5 basis points higher on the day at 0.23 percent.

The euro rose to a fresh 11-month high of $1.3461, up 0.5 percent on the day from $1.3419 while the Euro STOXX index of euro zone banking shares extended gains and was trading 1 percent higher.

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