LONDON -(Dow Jones)- Bonds issued by euro-zone's more fragile sovereigns rose Thursday, buoyed by expectations that the European Central Bank will reveal further bond buying plans to shore up confidence. Market sentiment was further lifted by Spain's well received EUR2.468 billion three year bond auction. The bid-to-cover ratio was 2.27 compared to 2.2 at a previous sale. The average yield at the auction was 3.717%, tighter than secondary market levels before the sale and the amount sold was near the upper end of the targeted range. Spanish and Italian bonds rallied strongly Thursday morning, while peripheral yield spreads tightened across the board. Ten year Spanish yield spreads over German bunds were 14.6 basis points tighter at 236.6, the narrowest since Nov. 24., according to Tradeweb. Italian 10-year yield spreads versus bunds were 10.3 basis points tighter at 163.1. Belgium was 5.5 bps tighter at 114.4bps and Portugal was 1.8bps narrower at 385.7bps. The rally can be attributed to two factors, an analyst said. Firstly, the more aggressive bond purchasing program being undertaking by the ECB in recent days, targeting Irish and Portuguese debt; and hopes that the ECB will reveal plans to buy more bonds later Thursday. -By Irene Chapple, Dow Jones Newswires; 44 207 842 9291; irene.chapple@ dowjones.com (Emese Bartha and in Frankfurt and Mark Brown and Neelabh Chaturvedi in London contributed to this report)

Source