German bond yields to 10 years were near the lowest in a week

German bond yields to 10 years were near the lowest in a week after Fitch Ratings said it may cut Greece's credit rating to non-investment grade within six weeks, underlying demand for more active insurance.

Two-year German yields were within two points of least 12 days. Fitch said late yesterday that it expected a review of "fiscal sustainability"of Greece, to be completed in January and there is a "high probability"of a rebate. The European Central Bank plans to carry out a period of three months of operation of long-term refinancing to banks today.

"Downgrades can continue in the new year, " said Mohit Kumar, fixed income strategist at Deutsche Bank AG in London. "We need to see a concerted response from the euro area. Otherwise the negative sentiment is likely to continue."

German 10-year yields were little changed at 2.99 percent as of 10:09 am in London. The 2.5 percent security due in January 2021 traded at 95.81. Two-year yields were little changed at 1.04 percent.

Moody's Investors Service placed long-term A1 and Prime-1 ratings Portugal short-term government bond on duty yesterday, saying that the rating may be cut by a level or two "slow" growth of the economy. The same agency credit cut Ireland's five levels of classification on 17 December.

Greek government bonds were little changed 10 years, with the 10-year yield to 12.16 percent. Portuguese equivalent maturity bonds fell, pushing yields up to five basis points to 6.8 percent. Spanish 10-year bonds were little changed at 5.56 percent and Italian yields remained at 4.67 percent.