Spanish 10-year government bonds dropped for a second day after the nation sold 4.76 billion euros ($6.06 billion) of three-, five- and 20-year securities.

The extra yield investors demand to hold Spain’s 10-year securities instead of German bunds widened to the most in four weeks as Market News International said the European Central Bank was reluctant to buy government bonds after borrowing costs declined. German two-year yields were below zero for a fourth day before the ECB announces its decision on interest rates. Belgium’s yields fell to a record as its debt agency said bank- financing costs won’t require extra bond sales this year.

“Spanish yields are rising partly because of new supply today and growing speculation in the market that Spain may not apply for the ECB’s aid program any time soon,” said Jamie Searle, a fixed-income strategist at Citigroup Inc. in London. “Those who bought peripheral bonds in anticipation of this may be lightening up on their positions a bit.”

Spain’s 10-year yield rose 14 basis points, or 0.14 percentage point, to 5.83 percent at 12:35 p.m. London time after reaching 5.84 percent, the highest since Oct. 16. The 5.85 percent bond due in January 2022 fell 0.96, or 9.60 euros per 1,000-euro face amount, to 100.115.

There’s an increasingly widespread view Spain can put off a decision on whether to ask for aid until 2013, with the country’s next bond redemptions not due until January, Market News said, citing European Union officials it didn’t name.

German Yields

Germany’s 10-year bund yield was little changed at 1.39 percent after sliding to 1.36 percent, the lowest since Sept. 3. The two-year rate was at minus 0.033 percent.

The spread on Spain’s 10-year bonds over similar-maturity bunds widened 13 basis points to 444 basis points after expanding to 448 basis points, the most since Oct. 11.

The Treasury in Madrid sold three-year notes at an average yield of 3.66 percent, compared with 3.956 percent at a sale last month, and a new five-year benchmark bond at 4.68 percent.

It sold 731 million euros of bonds maturing in 2032 at an average yield of 6.328 percent, compared with 4.777 percent when they were last sold in October 2010.

Central bank President Mario Draghi will hold a press conference at 2:30 p.m. in Frankfurt to discuss the rate decision. Inflation risks are “very low” and the debt crisis is starting to hurt Germany, he said at a conference yesterday.

Germany’s exports, adjusted for work days and seasonal changes, fell 2.5 percent from August, when they gained 2.3 percent, the Federal Statistics Office said. Economists surveyed by Bloomberg News forecast a decline of 1.5 percent.

‘Market Consensus’

“The market consensus is that the ECB will keep rates on hold, but I would not be surprised if they cut today,” said Charles Berry, a government-bond trader at Landesbank Baden Wuerttemberg in Stuttgart. “Judging from recent comments from Draghi, I think he is preparing the market for lower rates. The impact of the crisis is hitting core countries like Germany. Core bond yields are likely to stay low.”

Belgian bonds rose, pushing the yield on 10-year securities down as much as three basis points to 2.32 percent, a record low.

The country’s debt management agency said it doesn’t plan any additional debt sales this year to finance its 2.9 billion- euro portion of the 5.5 billion-euro capital injection for lender Dexia SA.

German bonds returned 3.9 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Spain’s bonds rose 2.8 percent and Belgian securities handed investors a return of 14 percent.