LONDON, Nov 7 (Reuters) - Borrowing costs in the euro

area nudged up on Friday and German bond yields hovered around

one-month highs with traders confident that the European Central

Bank is likely done with its easing cycle.

In earlier trade, both 10 and 30-year

German bond yields rose 3-4 bps to their highest

since October 10, to around 2.68% and 3.28% respectively. By

1620 GMT, the 10-year yield was up 1 bp and the 30-year yield

was up 2 bps.

Bond yields, which move up when their price falls, have

ticked higher in recent days, as investors become more confident

that the European Central Bank would keep rates on hold in

coming months when policymakers met last week

"The risk is still towards a cut but that is a risk more

than anything else," said Frederik Ducrozet, head of

macroeconomic research at Pictet Wealth Management.

Money markets price in a roughly 40% chance of an ECB rate

cut by July next year.

Ducrozet said a speech by ECB board member Isabel Schnabel

on Thursday may have added to some upward pressure on long-dated

bond yields.

The ECB is still far away from resuming debt purchases to

inject liquidity into the banking system as it first needs to

work off more of the bonds it bought over a decade of easy

policy, said Schnabel.

She is in charge of the ECB's market operations.

Meanwhile, the U.S. government shutdown has left investors

in the dark without fresh data.

Traders price a roughly 70% chance of a quarter point move,

with focus on the end of the shutdown, with odds rising on

Thursday when a batch of private labour indicators pointed to a

weakening economy.

In the absence of the widely watched U.S. jobs report that

was not released as scheduled on Friday, investors made do with

the University of Michigan's preliminary November consumer

sentiment data. That showed sentiment at its lowest since June

2022, helping lower bond yields.

Most 10-year bond yields across the bloc were just a bit

higher on the day. French yields touched 3.47%, and Italian ones

hit 3.45% - their highest since

mid-October in earlier trade.

Broadly speaking, the German 10-year yield is where it has

averaged all year. ING analysts said in a note it had "happily

mean-reverted around" 2.6%.

They think, however, with the ECB now firmly on hold, and

more German debt issuance upcoming, it should head towards "the

2.75% to 3% area".

(Reporting by Alun John and Dhara Ranasinghe, additional

reporting by Yoruk Bahceli ; Editing by Sharon Singleton and Ros

Russell)