Italian bond futures rose on Thursday after a sale of government debt which met modest demand in thin year-end markets, while German government bonds were pulled up by a rally in US Treasuries. Italy sold 6 billion euros of three- and 10-year BTPs, and 2.1 billion euros of floating-rate notes, but yields rose in the challenging liquidity conditions and with concerns over Europe's debt crisis lurking in investors' minds.
"The bid amounts don't look particularly great the periphery euro zone countries are under pressure to raise a lot of cash and the market has been heavy as the sovereign confidence crisis is not over so all these auctions are going to be work," said Luca Jellinek, head of European rate strategy at Credit Agricole. "This is the first auction that settles in the new year and I think they will continue to be like this with moderate demand and big concessions."
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