France auctioned 8.59 billion euros of debt with lower yields in the first test after the S&P downgrade to the euro area's second largest economy's top rating over the weekend.

The government sold 4.503 billion euros of 12-week bonds with a yield of 0.165%, compared with 0.167% in the prior sale of 13-week notes last week. It also sold 2.192 billion euros of 25-week treasury bills which also saw a decline in borrowing cost to 0.281% versus 0.286% last week, where the 51-week bills showed a decline in yield to 0.406% from 0.454% in the prior auction.