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* Vaccine hurdles, Fed meeting support euro zone government
bonds
* France to raise 7 billion euros from new green bond
* Greece hires banks for first 30-year bond since 2008
(Adds details)
By Yoruk Bahceli
AMSTERDAM, March 16 (Reuters) - Euro zone government bonds
held ground on Tuesday, as caution set in before a U.S. Federal
Reserve meeting and uncertainty around vaccinations in the bloc
supported safe-haven assets.
Wednesday's Fed meeting is in focus amid expectations that
economic growth and inflation will rebound after U.S. fiscal
stimulus, which has pushed up government bond yields across the
world in recent weeks. The Fed has so been seen as downplaying
those concerns.
Safe-haven euro zone government bonds were also supported by
concerns around the bloc's vaccination efforts -- which already
lag the U.S. and Britain -- after Europe's largest economies
temporarily halted the use of AstraZeneca's
vaccine.
The vaccine currently encompasses around 25% of the vaccines
distributed across the European Union, and 15% of those so far
administered, according to Mizuho analysts.
Uncertainty around the AstraZeneca vaccine rollout "adds to
the general theme that the Eurozone is lagging behind in the
recovery from the pandemic", ING analysts told clients.
On Tuesday, Germany's 10-year yield, the benchmark for the
euro area, was down about a basis point at -0.34% at 1228 GMT,
far below the highest since March 2020 around -0.20% touched in
late February. Most other 10-year yields were unchanged to a
touch lower. Bond yields move inversely with prices.
The gap between 10-year German and U.S. Treasury yields --
an indicator that reflects the divergence between safe-haven
assets in the euro area and the United States -- remains just
shy of its highest since February 2020, as U.S. yields have
continued to rise this month while German Bund yields have
fallen.
Italian bonds underperformed, with the 10-year yield up 2
basis points to 0.63%, raising the closely watched risk premium
over German equivalents to 97 basis points.
Elsewhere, France will raise 7 billion euros from the sale
of its second green bond, which it is selling via a syndicate of
banks, according to memos from three lead managers seen by
Reuters showed.
And Greece hired a syndicate of banks for its first new
30-year bond sale since 2008. The deal will most likely launch
on Wednesday as the debt management office said it would come
"in the near future," a phrase usually used a day before a sale.
There was little reaction to Germany's ZEW economic research
institute survey, which showed investor sentiment in Europe's
leading economy increased more than expected in March.
A large majority of experts also expect inflation to
continue rising, and higher long-term interest rates, ZEW said.
(Reporting by Yoruk Bahceli, editing by Larry King and Ed
Osmond)
