LONDON: German Bund futures opened lower on Thursday after hitting their highest in six weeks in the previous session and as a strong performance in US and Asian stocks overnight took the shine off the safe-haven asset.
Spain takes the limelight later this session with a 2-3 billion euro sale of three issues of two- to seven-year debt.
Short-term T-bill yields dropped from a month earlier at an auction on Tuesday and recent price cheapening was expected to help the bond sale, but yields are seen rising as investors remain unconvinced of the country's ability to control its finances..
"There was good concession put in yesterday. They will get away with long tails," a trader said.
The tail is the difference between the lowest and the average bid and is an indicator of the quality of the bidding at a sale.
The German Bund future was down 14 ticks on the day at 145.20, having risen in the previous session as far as 145.50. The contract is edging closer to a record high of 146.89 hit in June.
Ten-year Spanish bonds yielded around 7 percent in early, thin trading - levels beyond which funding costs are seen as unsustainable over the long-term.
Investors will also keep an eye on US regional factory activity and weekly jobless claims as they try to assess the health of the world's largest economy and gauge whether more monetary stimulus is on the way.
Federal Reserve Chairman Ben Bernanke on Tuesday offered a gloomy view of the economy's prospects, but provided few concrete clues on whether the US central bank was moving closer to a fresh round of monetary stimulus.
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