(Updates after U.S. jobs data)

By Harry Robertson

LONDON, July 5 (Reuters) - Euro zone bond yields dipped

on Friday after data showed U.S. jobs growth moderated in June

and was revised lower for May, bolstering expectations of

Federal Reserve interest rate cuts this year.

Data showed U.S. nonfarm payrolls rose 206,000 in June, more

than the 190,000 economists expected. Yet May's jobs growth

numbers were revised down to 218,000, from an earlier estimate

of 272,000.

The figures also showed wage growth fell to 3.9%

year-on-year in June, from 4.1% in May.

Germany's 10-year bond yield, the benchmark for

the euro zone bloc, was last down 3 basis points (bps) at

2.554%, having traded about 2 bps lower before the figures.

Yields move inversely to prices.

"Investors will interpret today's mixed jobs report as a

sign that demand is slowing in the labour market," said Richard

Flynn, managing director at Charles Schwab UK.

"The easing demand reflected in today's numbers may bode

well for interest rates."

France's 10-year bond yield was down 4 bps at

3.239%, set to end the week around 5 bps lower.

The gap between French and German 10-year borrowing costs

- a gauge of French risk - fell to its lowest

since June 13 at 67.6 bps and was last at 68.2 bps.

A poll showed Marine Le Pen's far-right Rassemblement

National party is likely to fall short of a majority in Sunday's

French parliamentary election, soothing investor nerves about

the party's potential spending plans.

"The French election outcome is unlikely to stir markets as

tail risks have faded," said Benjamin Schroeder, senior rates

strategist at ING.

Italy's 10-year yield was lower by 6 bps at

3.946%. The gap between Italian and German bond yields

narrowed to 139 bps, around the lowest since June

13.

Markets showed little reaction to Britain's general

election, where Keir Starmer's Labour party swept to a landslide

victory.

UK bond yields were down around 4 bps, broadly

in line with European markets. The pound and UK stocks rose

after the result.

Germany's two-year bond yield, which is more

sensitive to European Central Bank rate expectations, was down 1

bp at 2.929%.

(Reporting by Harry Robertson; Editing by Andrew Heavens, Anil

D'Silva and Barbara Lewis)