Greek Prime Minister George Papandreou and his new government narrowly won a confidence vote in parliament overnight, but risk appetite remained low as he still needs to pass austerity measures key to secure vital aid funds.

The Bundesbank retained 15 percent of the total amount issued, compared to an average of 17.6 percent on 10-year Bund issues this year. The bid cover was 1.6, compared to an average of 1.76.

JOHN DAVIES, STRATEGIST, WESTLB, LONDON

"The bid cover is around the average, a tad less but that's not bad, the Bundesbank didn't retain much so that's encouraging."

"Generally speaking there was a worry that perhaps it might not do so well given that we did get the confidence vote through from Greece last night and people were worried that maybe the safe-haven bid would be on the retreat by then and they'd be selling into a falling market."

"As it happens the market has realised, and probably rightly so, that what we saw last night was one small step in the right direction and by no means a big reduction in the uncertainty."

"Bunds have done alright so far today, people have simply moved their focus to whether the government can get the austerity measures through next week and that was in the end helpful for today's auction."

GLENN MARCI, RATE STRATEGIST, DZ BANK, FRANKFURT

"It's nothing spectacular, demand is a bit on the low side. You would have expected that if the Greek confidence vote had not passed then we would have seen higher demand, but as it was demand was a bit on the low side."

COPYRIGHT REUTERS, 2011