* Bunds rebound after three straight days of losses
* Investor focus turns to next week's rates meetings, data
* Wall Street Journal article on Fed underpins German debt
By Ana Nicolaci da Costa and Marius Zaharia
LONDON, July 26 German Bund futures rose on
Friday, bouncing back after three straight sessions of losses,
as investors positioned for a busy calendar of monetary policy
meetings and data next week.
Bonds were supported by a Wall Street Journal report that
the Fed may debate changing its forward guidance to underline
the message that it will keep rates low for a long time to come.
Markets have become very sensitive to any clues on the
timing of a potential U.S. stimulus withdrawal, which ultimately
will depend on incoming data. There will be plenty of that next
week, with U.S. jobs the highlight.
The Federal Reserve, the Bank of England and the European
Central Bank also all hold policy-setting meetings next week,
making investors cautious, analysts said.
"The Journal story has caused a bit of short-covering in the
market. But flows are very light and I think we would have done
that anyway today after the sell-off this week and with such a
busy next week ahead," one trader said.
German Bund futures were 18 ticks higher on the day
at 142.46, but remained almost two full points lower then at the
end of last week, having fallen on generally upbeat data.
Volumes were less than 500,000 lots, compared with over
800,000 in the previous two sessions, showing there was more
conviction in the sell-off than in the rebound.
"People actually want to be short this market," the trader
French consumer confidence bounced up in July, data showed
on Friday, adding to a rush of releases this week suggesting the
euro zone economy was picking up and easing pressure on the
European Central Bank for a rate cut.
Richard Adcock, technical analyst at UBS, said only a
closing break under 142.13 would trigger a more extended
sell-off. A second trader said the Bund would meet resistance at
142.80 - a 21-day moving average - and to the downside 142 was
the first support, followed by 141.61.
Italian and Spanish bonds were flat at 4.41 percent
and 4.59 percent, respectively.