Spain's two-year notes advanced for the first time in five days after the nation's borrowing costs fell at a bill sale, fueling optimism the nation can contain its debt crisis.

Italy's notes also rose as it auctioned 3.75 billion euros ($4.71 billion) of zero-coupon and inflation-linked securities. Spain's Prime Minister Mariano Rajoy is hosting European Union President Herman Van Rompuy for the first in a series of meetings aimed at helping the nation fulfill its funding needs. European Central Bank policy makers are due to decide on interest rates next week. Finland prepared to sell 4 billion euros of 10-year benchmark securities via banks.

“We've had some pretty positive auction results,” said Brian Barry, an analyst at Investec Bank Plc in London. “They illustrate demand for short-dated paper has remained relatively strong.”