(Updates in late morning European trading)

By Harry Robertson

LONDON, Jan 13 (Reuters) - Euro zone bond yields rose

again on Monday to new multi-month highs as strong U.S. jobs

data from Friday, a rise in oil prices, and another busy week of

government debt issuance continued to put pressure on global

fixed income markets.

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

the euro zone bloc, rose to 2.612%, the highest since July. It

was last up 2 basis points (bps) at 2.592%.

Figures on Friday showed the U.S. economy added 256,000 jobs

in December, the most since March and well above economists'

expectations of 160,000.

Traders on Monday were no longer certain the Federal Reserve

will cut rates this year, pricing just 24 bps of rate cuts for

2025, down from 43 before the employment data.

Dwindling expectations for Fed rate cuts have pushed up

U.S. bond yields sharply in recent weeks, taking the rest of the

world's bond markets with them.

"Bond markets struggle to stabilise with the rally in

oil, upbeat U.S. payrolls and the supply wave taking its toll,

and a change of dynamics seems unlikely this week," said Hauke

Siemssen, rates strategist at Commerzbank.

Oil prices have risen roughly 5% over the last two sessions,

driven by new U.S. sanctions on Russia's energy exports,

potentially adding to higher inflation expectations and

therefore lower rate cut pricing.

Siemssen said Commerzbank expects governments to issue

about 22 billion euros ($22 billion) of debt this week, with a

possibility of more coming from syndications. Last week they

sold 62 billion euros, Commerzbank said.

Italy

sold

three and seven-year bonds at their highest yields since

July at auction on Monday, while Germany moved some short-term

debt.

Italy's 10-year yield also reached its

highest level since July, at 3.855%, on Monday. It was last up 6

bps at 3.837%. Yields move inversely to prices.

The gap between Italian and German yields

widened to 124 bps, the highest since late November.

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

to European Central Bank rate expectations, rose to 2.322%, its

highest since November. It was last trading 2 bps higher at

2.302%.

With little on the euro zone economic calendar, investors

were waiting for December U.S. inflation data on Wednesday.

They were also keeping an eye on British markets, which

have been particularly

hard hit

in the global bond sell-off amid concerns about high

inflation and a stagnating economy.

($1 = 0.9804 euros)