The German government bonds increase for the second day after data showed that the retail sales fell in the Europe's largest economy in June, sparking concerns that the entire Eurozone might be facing a slowdown.

The Ten-year yields recorded a rise to the level that is close to its highest in three weeks. U. S. Treasury Secretary Timothy F. Geithner and German Finance Minister Wolfgang Schaeuble have extended their support to a plan by European leaders to preserve the Eurozone.

The European Financial Stability Facility is planning to sell 1.125 percent bonds maturing in 2015 worth 1.5 billion euros. The 10-year bund yield fell 0.02 percentage point, to 1.35 percent this mornig at the time of reporting.

The retail sales in Germany adjusted for inflation and seasonal swings, recorded a fall of 0.1 percent in June after falling 0.3 per cent during May, according to the figures released by the Federal Statistics Office in Wiesbaden. Analysts were expecting the figure to rise about 0.5 per cent for during the month.

European Central Bank President Mario Draghi is working with national governments and central banks to build consensus for a plan to reduce the borrowing costs for Spain and Italy.