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Euro zone bond yields rise after US jobs data

December 05, 2022 00:00:00

LONDON, Dec 4 (Reuters): European government bond yields rose after Friday data showed US employers hired more workers than expected in November and raised wages, complicating the Federal Reserve's intention to start slowing the pace of its interest rate hikes this month.

Germany's 10-year bund yield , the benchmark for the euro zone, rose as much as 5 basis points on the day to 1.872 per cent, having earlier traded down as low as 1.76 per cent, its lowest since Sept ember19.

The German two-year yield , sensitive to interest rate expectations, rose as much as 8 bps to 2.12 per cent, compared with 1.958 per cent before the data.

Italy's 10-year bond yield rose as much as 8 bps 3.758 per cent, having earlier dropped as low as 3.647 per cent, its lowest since late August.

The moves followed larger shifts in US Treasury yields following the data, which showed US nonfarm payrolls increased by 263,000 jobs last month, compared to a Reuters estimate of 200,000.

Government bond yields have dropped sharply in recent weeks have driven by hopes the US Federal Reserve will move away from its aggressive pace of interest rate hikes, which earlier in the year badly bruised bond prices and sent yields soaring.

This rebound had been underscored this week by a dovish speech by Fed chair Jerome Powell on Wednesday - as well as US data on Thursday that raised concerns about slowing economic growth while also indicating a slowdown in inflation.

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