EURO GOVT-Bunds reverse losses after strong German auction

* Strong German auction lifts Bunds from lows

* Germany sells 1.7 bln euros of 2044 bonds

* France also sells 7.5 bln euros of paper

By Kirsten Donovan

LONDON, Oct 31 (Reuters) - German Bunds reversed early losses on Wednesday after strong demand at a sale of longer-dated government bonds but with Wall Street set to open higher further gains may be limited.

Investors snapped up Germany's 2044 bonds and France also had no problem selling debt with maturities up to 2035 in one of the last chances to secure ultra-long returns this year.

"(The German auction) was very successful, especially compared to previous auctions," said ING rate strategist Alessandro Giansanti.

Although both sales had been expected to go well, traders had tried to cheapen the paper in early trading as they made room for it on their books, leading to the fall in prices.

German Bund futures were last three ticks higher at 141.57, having earlier fallen as low as 141.18 and after failing to break technical resistance at 142.00 on Tuesday.

"The long-end (German) auction was good but we're still seeing selling lower down the curve," one trader said.

"European equities are looking quite strong and General Motors have some cracking results out which should truncate some of the price action on Wall Street when it reopens and keep Treasuries, and in turn Bunds, under pressure."

However, another said he expected Bunds to rally as investors adjusted their positions for the end of the month.

Germany raised 1.7 billion euros at its bond sale, attracting bids for 2.3 times the amount on offer, compared with 1.5 times at a previous sale. France raised 7.5 billion euros .

Commerzbank rate strategists said in a note that the difference in yields between 30-year and 10-year German Bunds could narrow after the auction, heading back towards 80 basis points from around 85.

"Going out of today's supply we could well imagine a correction...also given that 10-year yields appear vulnerable after their recent rally on the back of hurricane Sandy and potentially stronger macro data in the wings towards the end of the week."

German 10-year government bond yields were flat at 1.48 percent but 30-year yields were 2.5 basis points lower at 2.32 percent.

U.S. MARKETS REOPEN

The reopening of U.S. markets after the giant storm Sandy closed much of New York's financial district for two days, may add to volatility.

Stock futures pointed to Wall Street opening higher, with General Motors up around 3.5 percent in pre-market trading after third-quarter results beat expectations

"We've not really had any negative surprises this week in terms of Italy, where yesterday's auction went OK, and Spain, to dampen down market confidence and there's maybe also an element of relief that U.S. markets will reopen today," said Credit Agricole rate strategist Orlando Green, when asked about the fall in safe-haven German paper.

But uncertainty over when Spain may request financial assistance - enabling the European Central Bank to buy its bonds - and political wrangling in Greece over unpopular austerity measures necessary to secure more aid is expected to stem any selling pressure in lower-risk government bonds.

A government source told Reuters that Spanish Prime Minister Mariano Rajoy does not see an urgent need to seek a rescue .