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Bund futures slipped 20 ticks to 142.30, matching levels seen in after-hours trading on Friday and around 75 ticks lower than prices seen before the ECB announced banks would pay back 137 billion euros of three-year loans this week.
Close attention will be paid to movements in short-term German bonds which were hit by Friday's announcement as traders priced in expectations that money market rates will rise over the coming months due to more excess cash in the system being returned to the ECB.
"We traded fairly heavily on Friday and presumably there's more of that to come... but I can't help feeling we've got a bit carried away given that we're not looking at rate hikes," a trader said.