Oct 2 Reuters Euro area government bond yields rose on Wednesday after longdated yields posted their biggest daily fall since midJune the day before on concerns about economic growth.

Fears of a wider regional conflict in the Middle East added downside pressure as investors rushed into the safety of government bonds, but its impact remained contained for now.

Data showed on Tuesday manufacturing activity across the euro zone declined at its fastest pace this year in September.

Investors await U.S. jobs data due later in the session as the Federal Reserve has shifted its focus to employment indicators after inflationary pressures eased.

Germany39;s 10year bond yield , the benchmark for the euro zone bloc, rose 4.5 basis point bps to 2.09. It hit 2.011 on Tuesday, its lowest level since January, before ending the session with a 9 bps drop.

Markets are taking a breather after yesterday39;s bond rally. However, geopolitics and the central bank39;s policy paths remained in focus, said Massimiliano Maxia, fixed income specialist at Allianz Global Investors.

Euro zone growth could be weaker in the near term than the ECB expects but the recovery should pick up pace later on, ECB Vice President Luis de Guindos said on Wednesday.

Markets priced in a 90 chance of a 25 bps rate cut by the European Central Bank in October , from 80 late on Friday.

The ECB has a clearcut case for cutting interest rates at its next meeting, ECB policymaker Martins Kazaks told Reuters….