* Euro zone periphery govt bond yields tmsnrt.rs\/2ii2Bqr (Adds details, updates prices)<\/p>\n
AMSTERDAM, April 6 (Reuters) – Euro zone bond yields rose on Tuesday as they caught up with better-than-expected U.S. employment data released on Friday, when European markets were closed for the Easter holiday.<\/p>\n
The data showed the U.S. economy created the most jobs in seven months in March, beating expectations, as more Americans got vaccinated and the government doled out additional pandemic relief money, marking the start of what could be the strongest economic performance this year in nearly four decades.<\/p>\n
That pushed safe-haven U.S. Treasury yields higher across the curve on Friday, and up as much as 6 basis points on five-year Treasuries.<\/p>\n
But U.S. bond yields dipped on Monday, with benchmark 10-year Treasury yields back near pre-Friday levels.<\/p>\n
On Tuesday, the first day of trading in the euro zone after the Easter holiday, Germany\u2019s 10-year yield, the benchmark for the bloc, was up 3 basis points by 1022 GMT at -0.30%.<\/p>\n
\u201cThanks to yesterday\u2019s decline in U.S. Treasury yields, any upward pressure on Bund yields stemming from spillover effects is likely to be limited,\u201d UniCredit analysts told clients.<\/p>\n
Lower-rated Southern European bonds underperformed higher-rated peers, with yields rising 3 to 5 basis points. . Bond yields move inversely with prices.<\/p>\n
European bond traders closely follow developments in U.S. Treasuries, as bonds in the two regions trade in close correlation.<\/p>\n
That caused worries in February, when a sharp rise in Treasury yields on expectations that a vast U.S. stimulus package would reignite growth and inflation also sent euro area borrowing costs higher. The move was seen as less justified given the bloc\u2019s weaker economic outlook coming out of the pandemic.<\/p>\n
Euro area data on Tuesday supported sentiment on economic recovery, with an investor morale index rising in April to its highest since August 2018, as investors base their expectations on accelerated vaccination programmes across the European Union.<\/p>\n
Unemployment in the bloc was unchanged in February compared to an upwardly revised January reading, as European furlough schemes limited the impact of the second wave of the pandemic on jobs.<\/p>\n
The focus this week will be on the European Central Bank, which is expected to release monthly data on its conventional asset purchases and the bi-monthly breakdown of its pandemic emergency bond purchases on Wednesday, followed by the minutes for its March meeting on Thursday.<\/p>\n