Bonds open higher awaiting U.S. payrolls data

Euro zone government bond futures opened higher on Friday as investors flocked to safer haven German Bunds while awaiting key U.S. non-farm payrolls data later in the session.

The U.S. Employment Report at 1230 GMT will be the main draw for global debt markets. A Reuters survey forecast non-farm payrolls increased by 513,000 in May — the largest monthly increase in more than 26 years. <ECON>

There is a dearth of euro zone data with revised first quarter gross domestic product the best offering at 0900 GMT.

Although bourses were expected to open higher at 0700 GMT <.FTEU3>, feeding off gains on Wall Street the previous session <.GSPC>, one trader said selling of Bunds on Thursday was overdone.

"We think the sell-off in Bunds on Thursday was overdone, and evident in the paring of losses going into the settlement close. Investors remain worried about Europe's ability to sort out its debt crisis," said the bonds trader in London.

At 0610 GMT, the June Bund future <FGBLc1> was up 22 ticks at 128.72. The two-year Schatz yield <EU2YT=RR> was down 0.2 basis points at 0.505 percent.