LONDON: German Bunds rose at Tuesday's open as growing unease over slow progress towards a possible Spanish bailout request pushed some investors to buy back into safe-haven assets after a recent sharp selloff.
Bund futures were 37 ticks higher at 139.37, adding to a small rise on Monday and climbing further away from the 5-1/2 month lows seen earlier in the previous session.
"I was surprised Bunds didn't do better yesterday given what was going on in the periphery but Spain remains under pressure... there's a lot of people out there not really sure what to do," a trader said.
Ten-year Spanish bond yields rose back above the 6 percent landmark on Monday, and the focus will remain on Madrid going into an auction of 12- and 18-month bills due around 0830 GMT.
Demand for the short-term paper was expected to be solid, supported by potential future European Central Bank buying, but any sign of weakness would cast doubt on more difficult sales of longer-term bonds on Thursday.
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