Jan 11 (Reuters) - The cost of insuring against Spanish and Italian debt defaults fell on Wednesday with benchmark 10-year government bond yields also lower as sentiment towards the periphery improved.
Five-year Italian credit default swaps were 20 basis points lower at 497 bps, according to monitor Markit, with the Spanish equivalent 23 bps lower at 400 bps.
The better tone was partially attributed to comments from an official at Fitch Ratings on Tuesday saying that the agency did not expect to cut France's triple-A credit rating this year as well as domestic buying of Spanish paper ahead of a debt sale on Thursday.
Spanish 10-year yields were 20 bps lower at 5.32 percent, while Italian 10-year yields were attempting to break below 7.0 percent.
German Bund futures turned positive meanwhile, after a sale of five-year bonds drew strong demand and were last up 5 ticks at 138.77.
German five-year bonds outperformed on the country's debt curve with yields 2.2 bps lower at 0.808 percent.
