Eurozone bond yields held just above record lows on Thursday, with investors reluctant to bet on a further drop before US jobs data and a long holiday weekend in Europe, where Greece's financing woes have yet to be sorted out.
The strength of the US jobs market will determine whether the Federal Reserve hikes interest rates in coming months - a move that might slow or even slightly reverse the falling trend in European borrowing costs. Friday's non-farm payrolls are expected to show an increase of 245,000 jobs in March, following a gain of 290,000 in February, according to economists polled by Reuters.
But on Wednesday, the ADP National Employment Report showed that US private employers added 189,000 jobs last month, falling well short of economists' expectations for a rise of 225,000. The figure was the weakest since January 2014.
"Payrolls data can have quite an impact on Europe," said Emile Cardon, market analyst at Rabobank. "Investors are worried about the jobs report and we have a long weekend ahead so we're seeing some profit taking."
German 10-year yields, which set the standard for euro zone borrowing costs, were up 2 basis point at 0.19 percent - a move mirrored by nearly all other euro zone markets, which will take a four-day break for the Easter holiday.
Greece's negotiations for new funds from its European creditors might significantly alter the market sentiment after the break. Commerzbank strategists recommend buying Bunds, betting on below-consensus jobs figures and higher flows into top-rated assets due to "Greek jitters".
Athens sent an updated list of reforms to lenders on Wednesday to unlock financial aid, but euro zone officials said more work was needed before new funds could be released.
Euro zone officials said on Thursday that Greece had told its creditors it will run out of money on April 9. The Greek finance ministry denied making such a statement.
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