But a choppy reaction to a German business climate survey showed trade was erratic as investors adjusted positions before Christmas and the end of the year.
"Books are generally positioned to be flat in the weeks before Christmas. This year, markets have gone into shutdown mode earlier than they have done in the past," Brian Barry, fixed income analyst at Investec said.
German Bund futures, after seven straight sessions of losses, were a further 20 ticks lower at 144.21. The contract however was still up on the month and on the year.
Hopes of a US budget accord rose this week after President Barack Obama made a concession, offering to limit tax increases to incomes exceeding $400,000 per household - a higher threshold than the $250,000 he had sought earlier.
In the case of a deal, Bunds would "knee-jerk down but I don't see why we are going to collapse on it. I don't think that's the only reason Bunds have been reasonably well bid recently," a trader said.
"The growth outlook in Europe looks awful and those forecasts are presumably based on the fiscal cliff getting sorted out."
Data on Wednesday showed Germany's Ifo business sentiment index climbed for the second month running in December.
Bunds pared losses right after the release but then fell back again.
Center>Copyright Reuters, 2012