EURO GOVT-Bunds little changed before ECB meeting

LONDON, April 4 Thu Apr 4, 2013 2:06am EDT

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LONDON, April 4 (Reuters) - German Bund futures were little changed on Thursday, with investors reluctant to make any fresh bold bets before a European Central Bank meeting later in the day.

Analysts say markets are positioned for the ECB to keep its key interest rate unchanged at a record low 0.75 percent but potentially offer hints that future monetary policy easing might be on the cards.

Such speculation has emerged due to a recent set of weak economic data and fears that the Cypriot bailout - the first to impose losses on bank depositors - may hit confidence in the banking system on a regional level.

The euro zone Markit PMI index for March, due at 0758 GMT, is seen at 46.5, below the 50 mark that separates growth from contraction.

Bund futures were last 5 ticks higher on the day at 145.57, while cash 10-year German yields were 0.4 basis points lower at 1.278 percent.

"Given where yields are, the risk is for the market to be disappointed if (ECB President Mario Draghi) is not as dovish (as the market expects)," one trader said.

Spain aims to raise up to 4 billion euros in 2016, 2018 and 2021 bonds later on Thursday.

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