for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

UPDATE 3-Euro zone bonds hold ground, eyeing vaccinations and Fed

* Vaccine hurdles, Fed meeting support euro zone bonds

* France to raise 7 billion euros from new green bond

* Greece hires banks for first 30-year bond since 2008 (Updates prices)

AMSTERDAM/LONDON, March 16 (Reuters) - Euro zone government bonds held their ground on Tuesday, as caution set in before a U.S. Federal Reserve meeting and uncertainty surrounding 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 far been seen as playing down those concerns.

Safe-haven euro zone government bonds were also supported by concerns around the bloc’s vaccination efforts - which already lag the United States and Britain.

The European Union’s three largest economies have temporarily halted the use of AstraZeneca’s vaccine pending the outcome of investigations into unusual cases of a rare cerebral thrombosis in people who had received it.

The vaccine currently encompasses around 25% of the vaccines distributed across the EU, and 15% of those so far administered, according to Mizuho analysts.

Uncertainty around the rollout “adds to the general theme that the euro zone is lagging behind in the recovery from the pandemic”, ING analysts told clients.

AstraZeneca said on Sunday a review of safety data had shown no evidence of an increased risk of blood clots.

On Tuesday, Germany’s 10-year yield, the benchmark for the euro area, was flat at -0.337% at 1606 GMT, far below the -0.20% touched in late February, which was the highest level since March 2020.

Most other 10-year yields were broadly unchanged but 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 96 basis points.

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 morning trading on Wall Street, 10 year Treasury yields were flat at 1.609%.

Elsewhere, France will raise 7 billion euros from the sale of its second green bond, via a syndicate of banks, according to memos from three lead managers seen by Reuters.

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; Additional reporting by Julien Ponthus; Editing by Alison Williams

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up