Euro zone bond yields lower as recovery from gilt sell-off continues

LONDON, July 4 (Reuters) - Euro zone bond yields were lower on Friday as the recovery in the bloc's bond markets continued following the gilt-induced sell-off on Wednesday, while focus was turning to U.S. President Donald Trump's April 9 tariff deadline.

Germany's 10-year benchmark bund yield DE10YT=RR was down 3.5 basis points (bps) at 2.546%, having risen to an almost six-week high on Wednesday of 2.632% when Britain's gilt yields jumped due to renewed fiscal sustainability concerns. Bond yields move inversely with prices.

Britain's 10-year gilt yield GB10YT=RR was down 2.5 bps on Friday at 4.522%, having risen as high as 4.681% on Wednesday.

Wednesday's sharp collapse in British government bond prices immediately drew comparisons with former prime minister Liz Truss' short-lived premiership, sparked by a U-turn on cuts to welfare spending and a tearful appearance by finance minister Rachel Reeves in parliament.

Euro zone bonds had slipped in tandem with their British counterparts, led by those countries with shaky public finances themselves, such as France and Italy, but those bond markets were also recovering.

France's 10-year yield FR10YT=RR was down 2 bps at 3.258%, while Italy's was down 2.5 bps at 3.455%.

The spread between Italian and German 10-year yields DE10IT10=RR stood at about 90 bps.