(Corrects to say German yield rose to highest since late, not
early February in paragraph 4, Germany selling two-year, not
three-year bond in last paragraph)
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
AMSTERDAM, April 20 (Reuters) - Euro zone bond yields
continued to rise on Tuesday, but moves were contained after a
hefty sell-off on Monday in a data-light trading session just
two days before the bloc's central bank meeting.
Trading remained relatively contained compared to Monday,
when German bond yields rose as much as 5 basis points, with no
major data releases due on Tuesday and attention turning to the
European Central Bank meeting on Thursday.
Investors hope the meeting will give more clarity about the
ECB's stimulus plans once the bloc's economic recovery takes
Germany's 10-year yield, the benchmark for the region, rose
above Monday's peak to a new high since late February at -0.215%
at the session open, but dipped below that level and was last up
1 basis point at -0.23% at 0724 GMT.
Other euro area 10-year yields rose similarly.
"As the calendar remains light while the flow backdrop looks
set to improve significantly in coming days, we do not yet
expect (euro zone government bond) yields to sustain levels
above this year's highs and suggest buying into further Bund
weakness," Christoph Rieger, head of rates and credit research
at Commerzbank told clients.
Bond prices fall as yields rise.
Net cash flows -- the money investors have left from the
payments they receive from coupons and maturing bonds relative
to the amount of new issuance in the market -- are around 12
billion euros this week and nearly 15 billion euros next week,
according to Danske Bank.
Focus is also on ECB bond-buying, after its pandemic
emergency bond purchases slowed last week, according to Monday's
Data due later on Tuesday will show how much the ECB bought
last week before redemptions, which can hold down the net
The ECB increased the purchase of its emergency bond
purchases at its March meeting, but analysts broadly say that
they are yet to see a significant pick-up in bond buys.
Analysts at UniCredit said average weekly purchases since
the March meeting are around 16.8 billion euros, below the 17.8
billion euro weekly average since PEPP was launched last year.
In the primary market, the European Union is selling a
15-year bond via a syndicate of banks that will raise 4.75
billion euros to refinance debt backing EFSM bailout loans,
according to a lead manager memo seen by Reuters. In auctions,
Germany will raise 5 billion euros from a two-year bond and
Finland is seeking 1 billion euros from the re-opening of a
(Reporting by Yoruk Bahceli, Editing by William Maclean)