* Vaccine hurdles, Fed meeting support euro zone government
bonds
* France starts sale of new green bond
By Yoruk Bahceli
AMSTERDAM, March 16 (Reuters) - Euro zone government bonds
held ground in early Tuesday trade, 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 so far has been 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 on
Monday
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 unchanged at -0.34% at 0829 GMT, below the
highest since March 2020 around -0.20% touched in late February.
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.
In the primary market, France started the sale of its second
green bond via a syndicate of banks.
UniCredit analysts expect France to raise around 8 billion
euros from the deal, more than the 7 billion euros it raised
when it issued its first green bond in 2017, given higher
borrowing needs due to the pandemic and the popularity of
environmentally friendly assets.
Elsewhere, Germany and Finland will re-open existing bonds
via auction.
(Reporting by Yoruk Bahceli, editing by Larry King)
Astrazeneca (AZN)
