(Updates at 1030 GMT)

By Harry Robertson and Stefano Rebaudo

Aug 2 (Reuters) - German government bond yields slid on

Friday to their lowest level in around six months as investors

snapped up sovereign debt after weak U.S. economic data raised

fears about global growth and caused stocks to tumble.

Tensions in the Middle East and Thursday's Bank of England

interest rate cut also burnished the appeal of bonds, although

the debt of euro zone countries that are seen as riskier

investments, such as Italy, fared less well.

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

the euro zone, fell 5 basis points (bps) to 2.201%, the lowest

since February.

The yield, which moves inversely to the price, was set to

end the week 20 bps lower, the biggest fall since mid-June.

Investors were waiting for July U.S. employment data, which

will help guide Federal Reserve policy and is expected to show a

slight slowdown in the labour market.

Data on Thursday showed U.S. jobless claims rose more than

expected last week to 249,000, the highest since August 2023.

In addition, a measure of U.S. manufacturing activity

dropped to an eight-month low in July amid a slump in new

orders.

"We are seeing strong moves across major markets," said

Emmanouil Karimalis, macro rates strategist at UBS.

"It is a combination of several factors: the BoE cut has set

a more bullish tone this week, while markets are also increasing

their expectations for a Federal Reserve cut," he said.

"The weakness in the stock market, escalating geopolitical

tensions in the Middle East, and a slowdown in European

government bond supply in August are all supportive factors for

European bonds."

Stocks dropped around the world on Friday, with Europe's

main index down around 1.8% and U.S. futures down 1.1%

.

Concerns about the global economy led risky government bonds

to underperform their peers, with the Italian and French yield

spreads versus German bonds widening respectively to 146 basis

points (bps), the highest in almost a month, and

to 78 bps, the highest since last month's French

election.

Italy's 10-year bond yield was flat at 3.644% while France's

was down 1 bp at 2.978%.

Money markets priced in 60 bps of further European Central

Bank rate cuts in 2024, from about 50 bps a week ago

.

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

to ECB rate expectations, was last down 6 bps at 2.41% after

falling to its lowest since January at 2.38% earlier in the

session.

U.S. Treasury yields were down, after tumbling on Thursday

on the soft economic data and comments from Federal Reserve

Chair Jerome Powell in the previous session.