Oct 8 (Reuters) - Euro zone government bond yields fell

on Tuesday after rising for four straight sessions on the back

of a selloff in U.S. Treasuries driven by strong U.S. data.

Bond yields move inversely to prices.

The benchmark 10-year Treasury yield fell 3

basis points (bps) to 3.99% after topping 4% for the first time

in two months on Monday, as markets bet against another jumbo 50

basis point Federal Reserve rate cut after Friday's strong U.S.

jobs report.

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

sensitive to European Central Bank rate expectations, was last

down 2.5 bps at 2.23%. It hit 2.294% on Monday, its highest

level since Sept. 6.

Markets are pricing in an around 90% chance of a 25 bp rate

cut by the ECB this month.

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

the euro zone bloc, was down 1.5 bps to 2.24%. It hit 2.26% on

Monday, also its highest level since early September.

Italy's 10-year government bond yield dropped

0.5 bps to 3.56%, with the gap between Italian and German yields

at 129 bps.