LONDON Jan 28 German Bund futures extended
losses from Friday in early trade, with investors still
digesting the fallout of banks' larger than expected early
repayment of emergency European Central Bank loans.
Bund futures slipped 20 ticks to 142.30, matching
levels seen in after-hours trading on Friday and around 75 ticks
lower than prices seen before the ECB announced banks would pay
back 137 billion euros of three-year loans this week.
Close attention will be paid to movements in short-term
German bonds which were hit by Friday's announcement as traders
priced in expectations that money market rates will rise over
the coming months due to more excess cash in the system being
returned to the ECB.
"We traded fairly heavily on Friday and presumably there's
more of that to come... but I can't help feeling we've got a bit
carried away given that we're not looking at rate hikes," a