April 24, 2013 / 6:11 AM / 5 years ago

EURO GOVT-Bunds open lower as Italy expected to name new PM

LONDON, April 24 (Reuters) - Safe-haven Bund futures opened lower on Wednesday, as the Italian president was expected to nominate a new prime minister, ending the deadlock created by February’s inconclusive election.

The move would ease near-term political uncertainty in Italy, a country in dire need of reforms to boost growth and cut high debt levels.

The nomination is expected to curb appetite for low-risk German debt just before an auction of 2 billion euros of 30-year bonds, although rising expectations the European Central Bank will cut interest rates later this year may limit losses.

The German Ifo business sentiment indicator will be closely watched for any sign of economic weakness that the ECB might use as an argument to cut rates.

“It looks like we’re getting more movement in Italy - they’re expected to name a new prime minister. But the Ifo will be key as we’re now looking for (an ECB) move in May,” one trader said.

Bund futures were last 19 ticks lower on the day at 145.90. They rose as high as 146.77 on Tuesday, the highest since June 1, when it reached an all-time high of 146.89.

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