July 26, 2013 / 8:31 AM / 4 years ago

Bunds rebound as focus turns to next week's busy calendar

* 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

LONDON, July 26 (Reuters) - 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, giving investors plenty of reasons to be cautious, analysts said.

“The Journal story on a more dovish Fed approach next week or a more dovish rate guidance helps a bit.. but the other reason for the consolidation here is simply the sharp sell-off we have seen in the past few days,” Rainer Guntermann, strategist, at Commerzbank said.

“Going into the weekend, it seems that the market has found some technical support,” he said, flagging technical levels around 142 in the Bund.

German Bund futures were 46 ticks higher at 142.74, having fallen this week on generally upbeat data.

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.

One 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 lagged, with 10-year Italian yields up 4 basis points at 4.44 percent and the Spanish equivalent 2.6 bps higher at 4.62 percent.

Italy will offer up to 3 billion euros in zero-coupon bonds maturing in 2015 later.

U.S. consumer sentiment later this session will also be watched as investors try to gauge when the Fed may begin slowing monetary stimulus.

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