EURO GOVT-Bund futures turn positive as periphery struggles

LONDON Mon Feb 4, 2013 8:19am EST

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LONDON Feb 4 (Reuters) - German Bund futures erased early losses and pushed higher on Monday as the poor performance of bonds issued by the region's weaker states drove investors towards less risky assets.

Bund futures rose to a session high of 142.21, up 20 ticks on the day as Spanish and Italian bond yields continued to rise.

"Periphery has been trading awful all day, that's the story," a trader said.

In Spain, Prime Minister Mariano Rajoy was facing calls to resign over a corruption scandal in which he denies any wrongdoing.

Traders also cited the growing popularity of Italian former premier Silvio Berlusconi, who stepped down in 2011 with Italy in the middle of a full-blown economic crisis,as a big worry for investors before elections.

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