LONDON, March 5 Reuters Euro zone bond yields rose on Friday after Federal Reserve Chair Jerome Powell reiterated his stance that interest rates would stay low for a long time and said he didnt view a recent rise in U.S. borrowing costs as disorderly.
Rising oil prices also put some upward pressure on borrowing costs across the singlecurrency bloc, while U.S. Treasury yields rose sharply overnight following Powells speech.
That set the tone for European bond markets, with 10year bond yields 23 basis points higher in early trade.
Still, these moves were relatively modest compared to the overnight jump in U.S. yields perhaps a sign of caution in euro area markets ahead of next weeks European Central Bank meeting.
The headwinds from U.S. Treasuries remain strong but euro bond bears seem to be getting less aggressive as the ECB meeting draws closer, said Michael Leister, head of interest rates strategy at Commerzbank.
A slew of comments from ECB officials expressing concern about the pace of rising bond yields has helped bring some calm to the blocs debt markets this week.
Germanys benchmark 10year bond yield was last up 2 basis points at 0.29, holding below almost oneyear highs hit last week as world bond markets came under intense selling pressure.
In addition, German Bund yields were poised to end the week down around 4 bps the biggest weekly drop since December and breaking four straight weeks of increases.
French and Dutch 10year bond yields were also set…