LONDON, March 4 German Bund futures opened higher on Monday, with worries over the impact of automatic budget cuts in the United States and political uncertainty in Italy spurring demand for low-risk assets.
U.S. President Barack Obama and congressional Republican leaders failed last week to find an alternative plan to avert $85 billion worth of spending cuts, which economists expect to hit growth in the United States and elsewhere in the world.
Neither side has expressed any confidence an agreement will be reached soon.
In Italy, political parties have been wrangling over how to form a government after elections last week produced a hung parliament, raising concerns over whether the country can resume efforts to reform its indebted economy any time soon.
Bund futures were last 21 ticks higher at 145.72, having risen almost two full points last week.
"With the Italy deadlock continuing and the U.S. budget (impasse) I don't see any reason why Bunds shouldn't stay supported," one trader said.
Euro zone finance ministers meet in Brussels later in the day with a bailout for Cyprus topping the agenda, although a deal was not expected until later this month at the soonest.