* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
AMSTERDAM, April 6 (Reuters) - Euro zone bond yields rose on Tuesday as they digested better-than-expected U.S. employment data released on Friday, when European markets were closed for the Easter holiday.
The data showed the U.S. economy had created the most jobs in seven months in March, beating expectations, as more Americans got vaccinated and the government doled out additional pandemic relief money, marking the start of what could be the strongest economic performance this year in nearly four decades.
That pushed U.S. Treasury yields higher across the curve on Friday, and as much as 6 basis points on five-year Treasuries.
But U.S. bond yields dipped on Monday, with benchmark 10-year Treasury yields back near pre-Friday levels.
On Tuesday, the first day of trading in the euro zone after the Easter holiday, Germany's 10-year yield, the benchmark for the bloc, was up 2 basis points at 0732 GMT to -0.31%.
"Thanks to yesterday's decline in U.S. Treasury yields, any upward pressure on Bund yields stemming from spillover effects is likely to be limited," UniCredit analysts told clients.
European bond traders closely follow developments in U.S. Treasuries, as bonds in the two regions trade in close correlation.
That caused worry in February, when a sharp rise in Treasury yields on expectations that a vast stimulus package would reignite growth and inflation also sent euro area borrowing costs higher, a move seen as less justified given the bloc's weaker economic outlook coming out of the pandemic.
In terms of data releases, investors will be watching euro zone unemployment and investor sentiment data.
Focus this week will be on the European Central Bank, which is expected to release monthly data on its conventional asset purchases and the bi-monthly breakdown of its pandemic emergency bond purchases on Wednesday, followed by the minutes for its March meeting on Thursday.
(Reporting by Yoruk Bahceli Editing by Gareth Jones)
