Oct 24 - Euro zone government bond yields rose on Friday

after stronger-than-expected Purchasing Managers' Index readings

from the bloc prompted investors to slightly scale back bets on

a European Central Bank rate cut next year.

Euro zone business activity unexpectedly grew at a faster pace

in October. French business activity declined faster than

expected in October, while Germany's private sector recorded its

strongest growth in nearly two-and-a-half years.

The U.S. Bureau of Labor Statistics is set to release its

inflation report later on Friday.

Germany's 10-year Bund yields were up 0.5 basis points (bps)

at 2.58% after hitting 2.612%, their highest level since October

14.

Borrowing costs on both sides of the Atlantic rose on

Thursday after U.S. sanctions on Russia prompted a jump in oil

prices, which stoked inflation concerns.

Benchmark U.S. Treasury 10-year yields were up 2

bps at 4.01% after rising 3.5 bps a day earlier.

Money markets priced in a 54% chance of a 25-basis-point ECB

rate cut by July from 60% before the data.

The key rate is seen at around 1.85% in December 2026

from the current 2%.