LONDON: German government bonds were steady at Thursday's open with investors sidelined ahead of a Spanish debt auction and European Central Bank policy meeting where expectations are for rates to be cut to a record low.
The ECB announces its policy decision at 1145 GMT, with dismal economic data paving the way for the central bank to take its main refinancing rate down to just 0.75 percent .
"Twenty-five basis points seems to be the consensus and there's probably going to be some disappointment if they don't deliver," a trader said.
"Or perhaps the expectations just shift to next month. At the end of the day the data's not great, rates are staying lower for longer and there's not many reasons to sell Bunds."
The Bank of England is also expected to launch a third round of monetary stimulus.
September Bund futures were 6 ticks higher at 142.38, with 10-year yields up a basis point at 1.464 percent.
Spain will sell up to 3 billion euros of debt maturing in 2015, 2016 and 2022 and borrowing costs are set to stay high despite some easing of yields after euro zone leaders agreed measures at a summit last week to stabilise bond markets .
Both Spanish and Italian yields have risen this week as euphoria over last week's summit agreement has faded with markets keen for details of how the accord will be implemented.
"It feels like the forced buying, the short covering, we saw after the summit has been done now," a trader said.
"The auction should get done though although we'll probably get a concession going into it."
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