Athens's protracted debt talks hit another snag on Monday after feuding political leaders postponed a decision on the bailout terms by 24 hours, reviving fears of a disorderly default that could spread contagion in the euro zone.

Greece needs to agree to the painful austerity measures to receive a 130 billion euro rescue package from the International Monetary Fund and the European Union and meet a March 20 bond repayment.

Although many in markets expect a deal will be sealed, the delays are stoking fears Greece may miss a Feb. 15 deadline by which EU officials say a full package must be agreed to allow time to complete legal procedures relating to its debt swap.

"There's slightly more than a 50 percent chance for things to be resolved but it's a very close call and the market takes it by the headlines at the moment," said Rainer Guntermann, a strategist at Commerzbank.

"All the postponements of the deadlines are supportive for risk aversion in the market."

The March Bund future rose 41 ticks to 139.04, extending the previous day's gains to nearly reverse Friday's losses triggered by an upbeat US jobs report.

Still, the contract looks vulnerable while trading below the 62 percent retracement of last week's sell-off at 139.22, UBS technical analyst Richard Adcock said. A break below the 138.13 low hit on Friday could see further falls to the Jan. 24 low of 137.18, he added in a note.

German 10-year bond yields were 1.5 basis points lower at 1.875 percent. They are expected to stay stuck in a tight 1.80-2 percent range they have traded in since the start of the year, as uncertainty over Greece vies with investor optimism over the US and German economic outlook.