LONDON Jan 14 The German Bund future rebounded on Monday after falling sharply in the previous trading session but analysts said it had further room to ease before an auction of 10-year bonds this week.
Investors will look at euro zone industrial production numbers later in the day for the latest gauge on the region's economic health, as sluggish data has continued to support safe-haven demand, despite signs of stability in the periphery market.
German Bund futures were 17 ticks higher at 142.48, having fallen to 142.05 - their lowest in six weeks - on Friday.
"With the 10-year auction coming up out of Germany, there is a technical argument that yields should jump a bit higher with the new benchmark," Rainer Guntermann, strategist at Commerzbank said.
"I wouldn't be surprised to see yields edging higher to 1.70 (percent) by the middle of the week."
Germany is due to sell 5 billion euros of a bond maturing in February 2023 on Wednesday.