LONDON, Dec 2 (Reuters) - German government bonds opened lower on Thursday, ahead of a European Central Bank meeting which markets hope will deliver some sign of action to stem the euro zone's debt crisis.
Yield spreads of peripheral issuers over Bunds tightened on Wednesday as players cut short positions in the hope the ECB will take decisive steps to stop the spread of contagion to larger economies such as Spain and Italy.
Analysts cautioned there was scope for disappointment, however, saying the central bank was unlikely at this stage to expand its bond purchase programme [ID:nL3E6N2077]
"There's going to be disappointment in play, the market is expecting something radical and there has been no indication that we'll get that much," said a trader.
At 0709 GMT, December Bund futures
A U.S. official also told Reuters that Washington would support boosting an EU rescue facility via IMF funds but a Treasury official said there were no such discussions right now.
In supply, France will sell up to 5.5 billion euros of 2017, 2018 and 2025 bonds, while in a test of appetite for peripheral debt, Spain will sell around 3 billion euros of three-year bonds.