LONDON, April 7 Reuters Euro zone bond yields were flat on Wednesday, with southern European debt stabilising after a selloff in the previous session as markets braced for new supply from Italy and Portugal.

Italy started the process of selling new 50year and 7year bonds via a syndicate of banks on Wednesday, having flagged the new issues the previous day.

Portugal raised, via a syndicate of banks, 4 billion euros from a 10year bond on the back of 30 billion euros of demand, according to a lead manager memo.

The tone across euro zone debt markets was largely subdued, with most 10year bond yields down 12 basis points bps on the day following an overnight fall in U.S. Treasury yields.

Overall, the pull higher from U.S. rates is alive and well and the rebound in euro zone bond markets is largely technical and temporary in nature, said senior ING rates strategist Antoine Bouvet.

Germanys 10year Bund yield was flat at 0.32, down from recent highs around 0.26.

IHS Markits euro zone Services Purchasing Managers Index PMI rose to 49.6 in March from Februarys 45.7, higher than a flash estimate of 48.8 and only just shy of the 50 mark that separates growth from contraction.

The euro zone economy is on course for a robust recovery in the second half of the year that could allow the European Central Bank to start phasing out its emergency bond purchases in the third quarter, Dutch central bank chief Klaas Knot said.

The ECB bought a net 6.178 billion euros 5.20 billion of…