LONDON, Nov 26 (Reuters) - Deutsche Boerse's Eurex

exchange is eyeing a launch for a futures contract linked to

European Union bonds next year, it said on Tuesday.

The statement comes just weeks after the exchange said it

still needed to see the right conditions before launching the

futures, seeing confidence that the EU's bond programme --

currently temporary -- would extend beyond 2026 as a key

pre-requisite.

Futures contracts are derivatives through which investors

buy or sell underlying securities at a future date, allowing

investors to hedge their positions. They also make trading

easier by boosting liquidity.

The world's biggest bond markets, from the United States to

Germany, are supported by futures markets, so the launch of an

EU contract is seen as an important step as officials push for

markets to treat the bloc on the same terms as a government

borrower.

Backing its plans Eurex, cited the size of the EU's

borrowing programme, trading conditions comparable to the

largest governments, as well as the EU's recent move joining the

exchange's repo market for trading and clearing.

"This now (highly) developed market ecosystem, coupled with

the dimensions of the underlying programmes, provide confidence

that the pre-requisites for a 2025 launch of EU bond futures on

Eurex are met," its statement said.

The EU, which expects to raise over 700 billion euros ($741

billion) in common debt with the backing of member states by

2026 to finance a COVID recovery fund, has quickly become one of

the biggest borrowers in global bond markets. But its status as

an issuer beyond 2026 is uncertain.

Eurex's decision comes as NYSE-parent ICE is set to launch a

futures contract on an index of longer-dated EU bonds to start

trading from December.