CORRECTED-EURO GOVT-Bunds push higher as Portugal debt sale eyed
(Removes reference in eighth paragraph to Portuguese 5-year debt yielding less than Spain)
* Bund recovery seen short-lived; charts point to more falls
* Portugal in spotlight as 5-year bond tap eyed
* Will be Portugal's return to bond market post 2011 bailout
By Emelia Sithole-Matarise
LONDON, Jan 23 (Reuters) - German Bunds rose on Wednesday, propped up by month-end related buying by some investors looking to balance their portfolios and as traders acting on technical signals looked to profit out of recent rangebound performance.
The rebound in low-risk Bunds looked fragile, traders and strategists said, with investors still upbeat about higher-yielding euro zone debt after robust Spanish sale of 10-year bonds with Portugal expected to return this week to bond markets for the first time since its 2011 bailout.
The Bund future was last 28 ticks up on the day at 143.40, as some traders tried to push it to the top of the range around 143.70 that has held over the past 10 sessions. German 10-year yields were 1.5 basis points lower at 1.5 percent.
"There's some month-end related buying going on. With supply from the core out of the way after Holland yesterday, there's a good amount of redemptions now not just in Germany and going into month-end that is going to have an impact on the market," a trader said.
In supply, focus is on Portugal which is expected to reopen its October 2017 bond later in the day, according to a report by Thomson Reuters service IFR citing a bank managing the deal.
Portugal will aim to sell 2 billion euros of the bond via syndication, Portuguese business newspaper Diario Economico said, without giving a source.
"The Portuguese syndication should go pretty well. It probably will be as impressive as Spain but both Portuguese and Spanish bonds have performed really well and I expect that to continue," said RIA Capital Markets strategist Nick Stamenkovic.
Portuguese 10-year yields held steady on the day at 5.86 percent, after breaking below 6 percent for the first time in over two years on Tuesday after the report, with its five-year debt now yielding less than 5 percent.
The yields have tumbled from peaks above 17 percent hit early last year, as Lisbon's won cautious plaudits for its fiscal reforms and after the European Central Bank backed a pledge in July to do whatever it too to save the euro with a new bond purchase scheme.
Comments from EU commissioner for economic affairs, Olli Rehn, on Tuesday that the commission will support Portugal's return to the bond market added to investor confidence that the country could be on its way to exit its bailout due to expire at the end of this year.
Spanish 10-year yields were 3 bps down on the day at 5.12 percent, basking in the afterglow of the country's sale on Tuesday of a new 10-year bond since late 2011 which drew unprecedented demand from investors.
"There seems to be a lot of interest and hunt for yield so it's difficult to call an end to the rally in periphery," another trader said. (Editing by Toby Chopra)