EURO GOVT-Bunds flat on caution before US election, Greek vote

* Reaction to U.S. election seen muted, short-lived

* Austria sells 1.3 bln euros of bonds

LONDON, Nov 6 (Reuters) - Low-risk German government bonds were steady, with investors wary of placing big bets before Tuesday's close-run U.S. election and a Greek parliamentary vote on crucial austerity measures.

Polls indicate the race between President Barack Obama and Republican challenger Mitt Romney will be very close with the risk of a change in fiscal and monetary policy in the world's largest economy keeping investors on the sidelines .

Bunds are likely to be buffeted by any moves in U.S. Treasuries following the election, although concerns related to the euro zone debt crisis will remain the main driver of the market.

Some analysts say a win by Obama would be positive for U.S. government debt, with U.S. Federal Reserve Chairman Ben Bernanke perhaps staying on beyond January 2014 when his term expires, while a Romney win could be positive for stocks, helped by business-friendly policies and tax cuts.

``The worse case would be an uncertain outcome over who the next president will be... that would be positive for the likes of Bunds,'' said Gary Jenkins, director of Swordfish Research.

``If we get a definite victory for either opponent, it may not make a huge amount of difference to Europe in the short term. Europe has got its own problems.''

December Bund futures were flat on the day at 142.13 after rallying on Monday.

``There doesn't seem to be massive positioning either way,'' a trader said.

``The feeling is that if Obama wins, it's going to be fairly dovish from the Fed point of view but I'm not sure we're going to see major moves either way,'' he said, adding that while Bunds traded above 142.00, markets would look for more gains.

In Europe, the focus was on Greece as another parliamentary vote loomed on austerity measures required to secure further aid to keep the country afloat.

This pushed two-year German bond yields into negative territory on Monday for the first time in two months.

They were last down half a basis point at -0.015 percent , with the 10-year equivalent little changed at 1.43 percent.

EU Economic and Monetary Affairs Commissioner Olli Rehn said on Monday that international lenders and Greece were on track to reach a deal to unfreeze the emergency lending at a meeting of euro zone finance ministers on Nov. 12.

The renewed demand for lower-risk assets this week was supportive for Austria's sale of 1.3 billion euros of 2019 and 2022 bonds, allowing the country to raise funds at record low rates and complete over 90 percent of its target issuance for this year..

``Austria is a higher quality issuer so it wasn't really a big surprise the 10-year auction was a strong one,'' said Nomura rate stragist Artis Frankovics.

``There's a lot of important events coming up this week...and also going forward we have the (meeting on Nov.12) so we can see the risk off sentiment continue for a few days.''

Spanish yields eased after rising since Friday when Madrid surprised markets by announcing the launch of a new five-year benchmark bond this week, as well as a tap of a 2032 bond -- its first attempt to sell debt with a maturity of more than 10 years since July 2011.

Dealers typically try and cheapen the paper - or build a concession - before sales.

``We might see a little bit more concession building ahead of Thursday but most of it has probably been done now,'' the trader said.

Spanish 10-year bond yields were 5.5 basis points lower on the day at 5.72 percent with Rabobank noting they were at a ``technically interesting juncture'', having broken above a downward trend channel and now testing resistance from a longer-term trend line which began in March.