AMSTERDAM, March 23 Reuters Euro zone bond yields fell on Tuesday, supported by an uncertain coronavirus outlook in the bloc, as focus turned to a new bond sale from the European Union.

The EU started the sale of five and 25year bonds to fund its SURE unemployment scheme via a syndicate of banks.

It is expected to raise up to 13 billion euros from the sale, the remaining amount it needs to fund the scheme during the first quarter, according to a recent investor presentation.

The backdrop for safehaven euro area government bond remained supportive as Treasury yields dipped ahead of a 60 billion auction of twoyear bonds and tightened coronavirus measures in Europe underscored the blocs slower recovery from the virus. Bond yields fall as prices rise.

Germanys 10year yield, the benchmark for the bloc, was down 2 basis points to 0.33 at 0800 GMT.

Italys 10year yield was down to 0.64, bringing the risk premium it pays over German debt to 95 basis points.

With Treasuries taking a breather, however, especially EUR rates have more room to focus on other risk themes like the EUs vaccines spat with the UK and the still increasing infection numbers, ING analysts told clients.

Elsewhere, focus is on a report from the European Central Bank due later on Tuesday, which will release data on its bond buying before redemptions.

On Monday, data showed the ECB upped its net bond buying by half, after it announced at its policy meeting on March 11 that it would step up buying under…