By Emelia Sithole-Matarise
LONDON, Oct 24 (Reuters) - German Bund futures held on tothe previous day's gains on Thursday before euro zonemanufacturing surveys that are expected to show the tentativerecovery in the region's economies remains on track.
The euro zone data follows flash Markit/HSBC PurchasingManagers Index (PMI) numbers for China, the world's secondbiggest economy, which rose to a seven-month high in September.
German flash manufacturing PMI at 0728 GMT is expected torise to 51.5 in October from 51.1 in the previous month. Theeuro zone's PMI numbers, due at 0758 GMT, are seen up at 51.4this month from 51.1.
Bund futures were 5 ticks lower at 140.81, stayingwithin sight of a three-week high of 140.91 hit on Wednesday inthe wake of weak U.S. payrolls numbers which bolsteredexpectations the Federal Reserve will maintain its stimulus intonext year.
"If the PMIs come in stronger you'll see a moderate selloffbut we think the U.S. picture is going to underpin fixed incomeeven in Europe so there's limited downside for Bunds," a tradersaid.
German 10-year yields were flat on the day at 1.77 percent and some strategists said they could move lowerespecially if the PMIs miss forecasts or U.S. data worsens.
Other euro zone bonds also held steady.
"We think the economic data in the euro zone should confirmthe trend we have seen of late (of tentative recovery) butshould the data in the U.S. be really bad that could change thesituation," said Mathias van der Jeugt, a strategist at KBC.
"Where we are now we believe that, short term, the supportshould hold in German yields in the 1.73-1.74 percent area."
The market will keep a close eye on U.S. first-time claimsfor jobless benefits for the week ended Oct. 19 at 1230 GMT,with economists forecasting a total of 340,000 new filings,against 358,000 in the previous week.
U.S. flash manufacturing PMI for October, due at 1258 GMT,is seen at 52.5, slightly down from 52.8 in the final Septemberreport.
- Budget, Tax & Economy