LONDON: German government bond yields hit new lows along most of the curve on Wednesday, while Spanish and Italian bond yields rose ahead of a bond sale by Italy and with worries about Spain's banks intensifying.
German 10-year yields hit fresh lows of 1.34 percent, while futures rallied to 144.62 before retreating slightly to stand 26 ticks higher on the day at 144.56.
Five- and 30-year yields also hit record lows .
Italian 10-year government bonds yields nudged above 6 percent for the first time since mid-May ahead of an auction of 5- and 10-year bonds, while equivalent Spanish yields rose 7 basis points to 6.55 percent.
"There's no good news for the periphery out there, we're just waiting for the next bad headline out of Spain. Some of this looks like a pre-auction play," a trader said.
Shorter-dated paper in both countries unperformed, a typical sign of stress in financial markets.
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