German bunds fell for the first time in four days as the nation received bids for less than the maximum target at a sale of 10-year debt amid easing concern the debt crisis is worsening.

Spain's government securities rallied, with 10-year yields falling from the highest this year, after European Central Bank executive board member Benoit Coeure signaled the institution may resume its program of sovereign-debt purchases. Italy's bonds advanced even after borrowing costs increased as the country sold 11 billion euros ($14.4 billion) of Treasury bills.

For Germany "to attract demand at such low levels requires that a sort of risk-off momentum is in the background as the bidding takes place, whereas it's kind of taken a breather from the open this morning," said John Davies, a fixed-income strategist at WestLB AG in London. Coeure's comments "would be helpful to risk appetite," he said.

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