LONDON: German Bund futures extended their decline on Thursday after Chinese data eased some concerns about the world's No. 2 economy and as sentiment towards Spain improved before a debt auction.
Spain's borrowing costs are set to fall at the sale of up to 4.5 billion euros of 2015, 2016 and 2022 bonds after Moody's affirmed the country's investment grade credit rating and with Madrid expected to ask for aid soon, clearing the way for the European Central Bank to buy its bonds.
France was also due to sell up to 8 billion euros of shorter-dated paper and 2.5 billion euros of inflation-linked bonds.
German Bund futures were 19 ticks lower at 139.56 after falling below 140.00 on Wednesday for the first time in three weeks.
"(Interest) rates aren't going up so it's questionable how far Bunds can sell off," a trader said.
"But you're looking at the carry trade into year end even though some of those semi-core spreads over Bunds are looking a bit compressed, it's hard to fight it just now," he said, referring to market players buying higher-yielding bonds.
China's third-quarter gross domestic product grew 7.4 percent from a year earlier, matching expectations, while other data such as fixed asset investment, retail sales and industrial output slightly exceeded forecasts.
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