Italy's 30-billion-euro austerity package that includes tax hikes and an increase in the pension age also improved sentiment.

French President Nicolas Sarkozy and German Chancellor Angela Merkel meet later in the day to outline joint proposals to put to a Dec. 9 European Union summit, seen as make-or-break for the currency union.

On Tuesday, US Treasury Secretary Timothy Geithner kicks off his European visit in Germany to meet ECB President Mario Draghi and Germany officials. He will join EU leaders later in the week.

At 0711 GMT, Bund futures were 27 ticks lower at 135.24

"We will look for consolidation today in Bunds, given that expectations are on the rise that we might get a bolder policy response over the course of the week," said Rainer Guntermann, rate strategist at Commerzbank.

"(The Italian austerity package) is a little larger than people were looking for and is part of story, part of the crisis response. That's a slightly positive surprise."

European stock markets were expected to open higher, building on last week's biggest weekly gain since late 2008.

Markets were also gearing up for Thursday's European Central Bank meeting, with the bank widely expected to cut its key rate back to where it was at the beginning of the year, at 1 percent, and introduce longer-term unlimited euro loans.

These expectations should keep short-term euro zone debt well supported before the meeting, traders said.