Euro zone yields dip after data-driven jump
Aug 16 (Reuters) -Euro zone bond yields edged lower on Friday following a U.S. data-driven jump a day earlier, with investors bracing for further volatility next week.
Germany's 10-year yield DE10YT=RR, the benchmark for the bloc, was down 2 basis points at 2.24% by 0645 GMT. It jumped nearly 9 bps on Thursday on the back of strong U.S. data that boosted confidence in the world's largest economy.
Weaker-than expected U.S. jobs data earlier in August had fanned worries about a potential U.S. recession, sending bond yields tumbling, a move echoed by euro zone debt.
But yields have rebounded with better-than-expected data in recent days, with investors reducing their bets on a 50 bps U.S. Federal Reserve rate cut in September.
In the euro zone, traders were betting on over a 95% chance of a 25 bps European Central Bank rate cut in September and around 65 bps of cuts by year-end.
Italy's 10-year yield IT10YT=RR was down 2 basis points to 3.62%, with the closely-watched risk premium, or spread, it pays over Germany's at around 137 bps, near two-week lows.
Reporting by Yoruk Bahceli; Editing by Muralikumar Anantharaman
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