* Spanish yields continue to rise, little respite seen * Low hopes for finance ministers' meeting * Bund futures hit highest in a month By Kirsten Donovan LONDON, July 9 (Reuters) - Spanish bond yields rose and German Bund futures hit one-month highs on Monday, with financial market investors perceiving little chance of respite in the euro zone debt crisis from a meeting of finance ministers later in the day. Spanish yields rose another 10 basis points to pass the critical seven percent level, breached during the day on Friday and seen as unsustainable in the longer-term. The euro fell to a two-year low against the dollar, reflecting doubts over how measures agreed last month to stem the crisis will be implemented. Finance ministers - whose meeting only gets underway as European markets are closing - face a raft of questions over how they will aid indebted states and banks and construct a new banking oversight regime, but the latest talks may only highlight the initial deal's limitations. "The risk is the implementation risks may become even clearer," said Rabobank rate strategist Lyn Graham-Taylor. "The leaders don't help themselves by making big pronouncements and then starting to argue about them." Officials have agreed to help Spain and Italy by allowing the euro zone's bailout funds to buy bonds from the market and to directly recapitalise Spain's ailing banks. But the lack of detail on how the plans will be implemented, as well as opposition from Finland, have dampened initial bullishness along with questions over the rescue funds' capacity to undertake such steps and no signal the European Central Bank would take any further unconventional measures to support indebted countries. Spanish 10-year government bond yields were 10 basis points higher at 7.08 percent, with the Italian equivalent up a similar amount at 6.13 percent, coming under additional pressure as dealers tried to cheapen paper ahead of an auction at the end of the week. Yields on shorter-dated paper rose even more, with Spanish and Italian two-year yields up 20 and 30 basis points respectively. The flattening of the yield curve is typical in times of stress, reflecting elevated short-term risk. "In the absence of new news or further details on the agreed measures from today's meeting, the path of least resistance is for higher peripheral yields and Spain is back at fairly crucial levels," a trader said. "The periphery will give us the lead today but it looks like the market is just going to keep going after Spain until it cracks." September Bund futures rose 19 ticks to one-month highs of 144.13. Last week they posted their biggest weekly gain since January, also helped by weaker-than-expected U.S. jobs data which added to worries about global growth. UBS technical analyst Richard Adcock said a sustained break break above Friday's 144.02 high could see futures rise back to June's peaks - which come in at at 146.89 on Reuters charts. Two-year German yields hovered around zero after the European Central Bank last week cut interest rates to record lows. Core paper should stay well supported by coupon and redemption payments - including by Germany and France - which total around 90 billion euros in the first two weeks of July. That will also help auctions this week by the Netherlands and Germany before Italy tests sentiment with a bond sale on Friday.

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