LONDON, April 29 Italian bond futures rose on Monday as new Prime Minister Enrico Letta named a coalition government, ending two months of political deadlock and easing short-term concerns about the country's ability to implement reforms.
An inconclusive general election in February left Italy, the euro zone's third-largest economy, without an effective government, threatening investor confidence and holding up efforts to end a recession.
Letta will seek the backing of parliament later on Monday in a confidence vote.
"It's a step in the right direction," one trader said.
BTP futures were last 43 ticks higher at 114.84.
Bund futures, seen as a safe haven, were last 5 ticks lower on the day at 146.49, with losses limited by expectations that the European Central Bank could cut interest rates later this week.
Italy will issue five and 10-year bonds at auctions later in the day.