(Updates throughout)

By Dhara Ranasinghe and Alun John

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

area nudged up on Friday and benchmark 10-year German Bund

yields hovered at one-month highs with traders confident that

the European Central Bank is likely done with its easing cycle.

Germany's 10-year yield rose to around 2.68%, its highest

since October 10.

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

ticked higher in recent days, as investors become more confident

after the ECB Bank meeting last week that it will keep rates on

hold in coming months.

"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.

Signs of resilience in the U.S. economy, even with a lack of

economic data due to the government shutdown, has also added to

upward pressure on bond yields this week as investors question

whether the Federal Reserve will deliver a December rate cut.

Traders price a roughly 60% chance of a quarter point move,

with focus on the end of the shutdown.

Overall trade across big bond markets was subdued, with news

that China's exports are suffering their worst downturn since

February having little impact in Europe.

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.

Broadly speaking, however, 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".