MILAN, June 4 Reuters Euro zone government bond yields steadied on Friday ahead of the U.S. May employment report, which might give clues about when Federal Reserves bondbuying tapering discussions would start.
Thursdays ADP National Employment Report showing private payrolls increased by 978,000 jobs last month, the biggest increase since June 2020, triggered a rise in Treasury yields in light trading overnight.
A succession of strong sentiment surveys in the U.S. this week has revived fears of, still distant, Federal Reserve tightening, ING analysts said.
The only concern is a decline in employment components which, in our economics teams view, heralds another disappointing job growth figure of 500k today, they added.
According to a Reuters survey of economists, private payrolls likely increased by 600,000 jobs last month after rising by only 218,000 in April.
An increase of more than 600K jobs should be sufficient for Powell to officially start the tapering debate at the FOMC meeting on 16 June, Commerzbank analysts told clients.
Germanys 10year yield, the benchmark for the bloc, was flat by 1019 GMT, at 0.188.
Whatever happens today the arguments on both sides of the inflation and overheating debate are hardly likely to go away soon, Deutsche Bank analysts said, recalling Fed Chair Powells argument that he wants to see a string of good jobs numbers before the Fed starts to pare back its support.
Euro zone borrowing costs had been stable in the last few…