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.