LONDON, Oct 26 (Reuters) – German Bund futures jumped in choppy trading on Wednesday as market participants feared any crisis-targeting plan to come out of a summit of European leaders may lack concrete details.

Expectations of a comprehensive solution have waned as officials wrangle over how to scale up the euro zone rescue fund, and with little sign of agreement on how much of a loss private bondholders will take on Greek debt.

Bund futures saw a settlement close of 135.62, up 36 ticks on the day, having dipped in and out of negative territory throughout the day.

“We are shrouded in a considerable degree of uncertainty,” said Richard McGuire, rate strategist at Rabobank. “The risk is that you get once again a statement which is long on rhetoric and short on substance.

While there is consensus on the need for European banks to raise around 110 billion euros in extra capital to withstand a potential Greek debt default and wider financial contagion, there are uncertainties over other critical parts of the plan.

Bankers were locked in a high-stakes poker game with politicians over the scale of write-offs on Greek bonds. .

There were also uncertainties regarding complex plans to scale up the region’s 440 billion euro ($600 billion) bailout fund, known as the European Financial Stability Facility, without allowing it to draw on the ECB.

LONDON, Oct 26 (Reuters) – Bund futures eased in choppy trade on Wednesday, though demand could return if deep disagreements over how to resolve the euro zone debt crisis prevent policymakers meeting later in the day from unveiling detailed plans to markets.

Expectations of a comprehensive solution emerging from a second European Union summit in four days have waned as officials wrangle over how to scale up the euro zone rescue fund, and with little sign of agreement on how much of a loss private bondholders will take on Greek debt.

Bund futures fell 32 ticks to 134.94 but held on to most of the gains made in the previous two sessions. Trading was expected to be light, making volatile prices likely.

“In the run-up to the summit maybe there are some hopes out there that we might still get an additional piece of information or some surprise since expectations have come down,” said Commerzbank strategist Rainer Guntermann.

“At the margin this supports the case for a little bit of risk-taking today… (but) I wouldn’t necessarily buy into this on a multi-day horizon.”

With great uncertainty and a wide range of possible outcomes traders said some dealers were closing out positions.

The full EU summit was scheduled to begin at 1500 GMT, followed by a meeting of euro zone leaders at 1730 GMT, but sources told Reuters there was little likelihood of concrete numbers to flesh out the crisis response.

LONDON, Oct 26 (Reuters) – Bund futures eased in choppy trade on Wednesday, though demand could return if deep disagreements over how to resolve the euro zone debt crisis prevent policymakers meeting later in the day from unveiling detailed plans to markets.

Expectations of a comprehensive solution emerging from a second European Union summit in four days have fallen as officials wrangle over how to scale up the euro zone rescue fund, and with little sign of agreement on how much of a loss private bondholders will take on Greek debt.

“It’s pretty clear there’s going to be no real concrete detail from tonight, its disappointing… you can’t really blame people for standing on the sidelines on a day like this,” a trader said.

Bund futures fell 14 ticks to 135.12 but held on to most of the gains made in the previous two sessions. Trading was expected to be light, making volatile prices likely.

With high uncertainty and a wide range of possible outcomes traders said some dealers were closing out positions.

“I doubt we are going to sell off very far today because there’s a bias to be long going into the meeting. Tomorrow, if we have disappointment, I can imagine that we rally really hard,” said Achilleas Georgolopoulos, strategist at Lloyds Bank in London.

The full EU summit was scheduled to begin at 1500 GMT, followed by a meeting of euro zone leaders at 1730 GMT, but sources told Reuters there was little likelihood of concrete numbers to flesh out the crisis response.

LONDON, Oct 24 (Reuters) – German Bund futures closed little changed on Monday in a volatile session dominated by questions over whether plans on the table at a midweek European summit will be powerful enough to tackle the euro zone debt crisis.

Traders said the rejection of France’s proposal to turn the European Finanical Stability Facility rescue fund into a bank and allow it to tap unlimited European Central Bank money was a big disappointment.

The EU was now looking at a combined solution involving guaranteeing a portion of losses on new sovereign bond issues and creating a special purpose investment vehicle, though market participants said this would have more limited powers.

“The market still has concern over the evolution of key triggers that would give a better tone. As long as we don’t have any figures to put in front of the current situation, I think the markets will continue to remain in this range,” said BNP Paribas rate strategist Patrick Jacq in Paris.

“What we see is very limited action from real accounts. They are not in these markets.”

European leaders meet again on Wednesday in an effort to reach a final agreement on the anti-crisis strategy which had originally been promised on Sunday, but persistent disagreements delayed the process.

After earlier trading nearly a point above Friday’s settlement, Bund futures settled just 10 ticks higher at 134.77, and sold off further in after-hours trade to test the session low of 134.42.

LONDON, Oct 21 (Reuters) – Proposals to insure the first slice of losses on new euro zone sovereign debt could create a two-tier bond market for Italian and Spanish debt that would severely limit the countries’ borrowing options.

Policymakers are scrambling to agree on a way to leverage the existing European Financial Stability Facility (EFSF) to give it enough ammunition to fend off the threat that rising borrowing costs push Spain or Italy to the brink of default.

One proposal gathering momentum, in spite of political and legal hurdles, is for the EFSF to issue guarantees on new sovereign bonds that would protect holders from the first 20-30 percent of losses in the event of a default.

This would create a division between insured and non-insured debt, that could split a country’s investor base and suck liquidity out of the market unless new bonds were carefully constructed to allow them to trade on a par with existing debt.

“The issuer would have to create a new curve of insured debt, limiting the liquidity in both curves with risks that investors would dump the old non-insured bonds,” said Commerzbank rate strategist Christoph Rieger.

Based on a 20 percent insurance model, JPMorgan estimates that insured bonds issued by Italy would trade at a yield around 100 basis points below existing debt with new, insured Spanish debt likely to be priced 80 bps lower than existing bonds.

“If Italy is trading at 6 percent in the uninsured market, then the insured structure would be trading at 5 percent, roughly speaking,” said Pavan Wadhwa, global fixed income strategist at JPMorgan.

LONDON (Reuters) – Banks may face increased losses on their Greek bonds but the impact of forced, rather than voluntary, writedowns would add minimal extra cost and nothing like the disruption that followed Lehman’s collapse.

The net cost of triggering CDS payments was likely to be around 1.5 billion euros, most of which is already backed by collateral, based on economists’ estimates of the level of writedowns and on CDS volumes data.

This represents a tiny fraction of the expected 100 billion euros-plus losses that banks could face.

Greece’s failure to meet its bailout targets means a voluntary deal to write down private bond holdings is being revisited, with officials pushing investors to accept bigger losses and the growing risk that participation may be forced.

But policymakers are reluctant to allow a Greek restructuring to trigger credit default swap payments, fearful of a re-run of the 2008 financial market paralysis caused by a complex web of credit derivatives.

“The actual money changing hands is relatively small. The net payments through the system seem quite unlikely to cause… that kind of domino effect because it’s collateralised anyway,” said Michael Hampden-Turner, credit strategist at Citigroup.

Euro zone policymakers agreed a deal in July for creditors to take a 21 percent loss on their Greek debt holdings that would briefly place the country in ‘selective default’.

LONDON, Oct 19 (Reuters) – Bund futures fell on Wednesday after reports of a deal to increase the firepower of euro zone rescue fund eased safe-haven demand, despite subsequent denials, though trading was set to remain volatile until a weekend EU summit.

Two senior euro zone sources denied a report in Britain’s Guardian newspaper that France and Germany had agreed a deal to boost the euro zone bailout fund to two trillion euros.

However, a rally in riskier assets outweighed the effect of the latest Spanish credit rating downgrade by Moody’s which pushed the country’s bond yields only slightly higher on the day. The move had been anticipated after similar, though less severe, cuts by other agencies in recent weeks.

December futures fell ticks 50 ticks to 135.08, in line with after-hours trading when German debt sold off on the Guardian report.

“It’s a nervous and headline driven market today and probably for this week,” said Commerzbank strategist Rainer Guntermann.

Technical support levels for Bunds come at 134.73 and then 134.40 — the 38 percent and 50 percent pullback levels from recent gains, said PIA First.

Trading was set to remain volatile and driven by the swings in sentiment over whether policymakers will reach a deal to draw a line under the euro zone crisis at an EU leaders’summit this weekend, analysts said.

LONDON, Oct 17 (Reuters) – German government bonds rebounded on Monday following three weeks of losses after policymakers cooled market optimism that a promised plan to solve the euro zone debt crisis would be fully agreed by the weekend.

After the Group of 20 major economies heaped pressure on euro zone leaders at the weekend — saying they expected an Oct. 23 European Union summit to decisively address the crisis through a comprehensive plan — German finance minister Wolfgang Schaeuble played down the high expectations.

“The G20 were quite clear in teeing the market up for the outcome of the summit; now you have a concerted effort to downplay the result,” said Rabobank strategist Richard McGuire.

“It’s quite remarkable and adds to volatility and uncertainty over the near-term outlook.”

Bund futures rallied to a session high of 134.91, up over 150 ticks on the day, reversing early losses after Germany’s finance minister said a definitive solution would not come at the weekend.

Analysts said trading was set to be volatile over the coming session with price action driven by short-term speculation, keeping some real money investors sidelined in anticipation of a significant crisis response.

EU officials have said they are coming closer to agreement on critical elements of a rescue package, including a recapitalisation of the region’s banks.

LONDON, Oct 13 (Reuters) – Italian government bond yields rose to their highest levels since August on Thursday as the country sold a series of bonds and efforts by the European Central Bank to cap the increase had only limited success.

Italian yields climbed to their highest levels since the ECB began buying the country’s debt in the secondary market, before the auction, but solid demand at the debt sale and ECB intervention did little to curb their rise.

Bonds in the euro zone’s third largest economy have come under pressure in recent months on worries over the country’s debt pile. The outlook has been further clouded by political instability which has prompted Prime Minister Silvio Berlusconi to call a confidence vote in his government.

Italian bonds yielded more than 5.8 percent — not far from levels above 6 percent which first prompted the ECB to intervene to help make Italian yields more affordable.

“That is psychologically not very good,” Elisabeth Afseth, analyst at Evolution Securities said.

“It maybe points to the importance of this comprehensive solution that is supposed to be coming by the end of the month actually having some substance and being a proper package to deal with it.”

Germany and France, the leading powers in the 17-nation euro zone, have promised to propose a comprehensive strategy to fight the debt crisis at an EU summit delayed until Oct. 23.

LONDON, Oct 13 (Reuters) – Italian debt came under pressure on Thursday as the country sold its latest round of government bonds, prompting the European Central Bank to resume buying its debt in secondary markets to cap rising yields.

Ahead of the auctions, 10-year Italian yields climbed to their highest since the ECB began buying the country’s debt in August. Despite receiving solid demand at the debt sale, yields remained under pressure in the cash bond market.

Traders said the ECB, which has been largely absent from markets this week, started buying Italian bonds with maturities of around 10 years shortly after the auction, prompting yields to come off their peak.

“They (the ECB) started buying BTPs because they were trading so badly,” a trader said.

“The auctions looked alright but they came on the back of a 15 basis point concession after the market had been hammered all morning.”

Italy sold 6.2 billion euros of debt, split across four bonds, including the first sale of longer term debt that sits beyond the scope of the ECB’s support.

Ten-year Italian debt last yielded 5.818 percent, up 7.8 basis points on the day but off a session high of 5.87 percent — a level last seen in August before the ECB began intervening in Italian bond markets.