* Bunds inch lower before five-year debt auction
* Euro zone services PMI, Q3 GDP, U.S. ADP report in focus
* Portuguese debt steadies after rally
LONDON, Dec 4 (Reuters) - German Bund futures edged lower on Wednesday after data showed the Spanish services sector grew in November at the fastest rate since June 2010, easing euro zone growth and disinflation worries.
The data followed surveys showing an unexpected contraction in Spanish factory activity on Monday, and offered some relief after concerns that a potential slowdown in the euro zone economy could push inflation further below the ECB's target.
Investors are very sensitive to economic data before a European Central Bank policy meeting on Thursday, with many in the market expecting ECB President Mario Draghi to signal further monetary easing next year.
Euro zone services sector and revised third-quarter quarter gross domestic product data are due later on Wednesday.
U.S. ADP national employment figures will draw special attention before Friday's non-farm payrolls report, which will be scoured for clues to whether the Federal Reserve will trim its bond-buying stimulus in December or next year.
Bund futures fell 21 ticks to 141.07, while 10-year Bund yields rose 2 basis points to 1.75 percent, with some investors trimming German holdings to make room for the up to 4 billion euros of five-year debt on offer later in the day, according to traders.
"I doubt there will be a major breakout from the range before the ECB meeting... but investors are nervous and if we see a major blip in the data we could see an even bigger move," DZ Bank strategist Christian Lenk said.
Portuguese government bonds steadied after Tuesday's rally on the back of a larger-than-expected debt swap, which will ease Lisbon's refinancing needs for the next two years.
Ten-year yields rose 1 bp to 5.91 percent, five-year yields rose 2 bps to 4.94 percent, while two-year yields fell 3 bps to 3.30 percent.
Some in the market foresee a longer-term rally in Portuguese bonds as the debt swap moved Lisbon closer to a market comeback next year and increased the chance that it can come off international support.
"It was certainly a positive move," one trader said. "They are following what Ireland did, that's the way we see it. They are slightly behind the pace but they're certainly moving in the right direction."
Other analysts still see Portugal's borrowing costs as too high for a country with debt 1.3 times its economic output and say Lisbon will need at least a precautionary credit line once its 78 billion euro bailout programme finishes in 2014.
"The debt swap was a good step forward, but it still leaves Portugal with a funding need of 9 billion euros next year and we remain doubtful they can do that on their own," DZ Bank's Lenk said.