LONDON: German government bonds opened higher on Thursday as investors concerned about lack of progress in tackling the euro zone debt crisis sought liquid safe-haven assets ahead of the end of the year.
Spain is set to see yields fall at a sale of up to 3.5 billion euros of 2016, 2020 and 2021 bonds
"People are losing patience with the EU summit and then there's the Spanish auction," said a trader.
"Yes, these sales are getting done and there's some relief at that but it's at a price and every time there's more to sell we're going to be seeing more of a concession."
There was some relief for peripheral issuers on Wednesday in the wake of a successful Italian auction, despite the country having to pay an eye-watering 6.47 percent to borrow for five-years.
March Bund futures were 35 ticks higher at 138.21, with 10-year yields 2.5 basis points lower at 1.9 percent.
US Treasury yields were also lower and the demand for safe-haven assets was reflected on Wednesday at a German two-year bond sale where the average yields fell to just 0.29 percent, the lowest in the euro-era.
Measures by European Union leaders to strengthen fiscal integration as the debt crisis worsens failed to restore investor confidence and markets are braced for blanket credit ratings downgrades.
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