Bund futures were 21 ticks higher on the day at 138.19, with extremely low liquidity likely to fuel volatile price movements throughout the day.

Italy will sell up to 9 billion euros of six-month treasury bills and 2.5 billion euros of two-year zero coupon bonds. Demand from domestic banks was expected to provide a smooth auction, albeit at a high cost.

The country faces the more difficult task of selling long-term debt on Thursday where there will be a greater reliance on international investors to buy 8.5 billion euros of debt with maturities of up to 10 years.