EURO GOVT-Spain, Italy yields slip on strong debt sale demand

LONDON Jan 15 (Reuters) - Spanish and Italian bond yields reversed an earlier rise on Tuesday with traders citing strong demand at the two countries' debt auctions.

"T-bill auctions were OK. There is good demand for this syndicated Italian deal so I think that's why (yields are falling)," a trader said.

Spain successfully sold 5.75 billion euros of treasury bills, beating their initial target of 4.5-5.5 billion euros while Italy was selling 15-year bonds via syndication.

Spanish 10-year yields were last flat on the day at 5.04 percent, having risen as high as 5.14 percent earlier while equivalent Italian yields were 2 basis points lower at 4.17 percent.