* Spain mandates banks to sell new 10-year bond
* Market nervy glut of issuance could be hard to digest
* Bunds slip before German sentiment data
By Emelia Sithole-Matarise
LONDON, May 14 (Reuters) - Spanish bonds fell in value on Tuesday as it launched a new 10-year bond while investor wariness before German economic sentiment data knocked the Bund future lower.
Spain is selling the new bond via a syndicate of banks, confirming market speculation last week that sparked selling of its debt on concerns that more issuance in a short time could be hard for the market to digest.
The syndicated sale comes on the heels of a well-received bond auction last week and Italy's 8 billion euro sale on Monday of conventional and floating-rate debt.
Market participants expect it to go smoothly as demand for higher-yielding euro zone debt continues to be supported by ultra-easy monetary policies from major central banks.
"We're seeing a little bit of heavy price action based on rumoured and now confirmed syndication out of Spain. That's really more a product of how far and how fast we've come here in the periphery where yields have fallen markedly," said Richard McGuire, a strategist at Rabobank.
"So investors might be taking some money off the table using this syndication as a pretext, so the moves are more of a correction rather than signalling the onset of a bearish trend."
Spanish 10-year yields were last 6 basis points higher at 4.34 percent, underperforming Italian equivalents which were 2 bps up at 3.936 percent. Spanish yields have risen more than 20 basis points since last week.
The weaker tone in the euro zone periphery did little to lift German Bunds as investors shied away from putting on big bets before German sentiment data later in the session.
The Bund future was 11 ticks down at 144.78 with German 10-year yields up 1.2 bps at 1.37 percent.
The ZEW indicator due at 0900 GMT is likely to show a recovery in German analyst and investor sentiment in May after a sharp fall in April, according to a Reuters poll.
Stronger-than-expected macroeconomic reports could cool expectations of more monetary easing from the European Central Bank which have supported euro zone bonds in recent days.
"Market positioning is fairly flat after the long (positions) were shaken out following the sell-off at the end of last week. People don't have huge positions in case things go wrong," a trader said.