* Flash PMI data awaited
* Markets braced for rate cuts globally
* EZ bond yields set to end Friday with weekly decline
* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
By Dhara Ranasinghe
LONDON, June 21 (Reuters) - Euro zone government bond yields held near recent record or multi-year lows on Friday, with attention turning to a key reading of economic activity - the Purchasing Managers’ Index.
Bond yields, which fall when prices rise, have slid again this week, after European Central Bank President Mario Draghi said on Tuesday that more monetary easing was on its way unless inflation picked up.
Euro zone money markets almost fully price in a 10-basis-point rate cut at the ECB’s September meeting, and even a stabilisation in Friday’s PMI numbers is unlikely to change that view, analysts said.
Economists polled by Reuters expect a Markit flash composite PMI for June of 51.8, unchanged from May. The manufacturing PMI, which has weakened in recent months, is expected to rise to 48 in June from 47.7 the previous month.
“What we’ve seen this week is that central banks are ready to act, so I would expect markets to react less to today’s PMI as easing is coming,” said Pooja Kumra, European rates strategist at TD Securities in London.
In early trade, most 10-year bond yields in the euro zone were around a basis point higher on the day.
Germany’s benchmark 10-year Bund yields was minus 0.31%, near a record low of around minus 0.33% on Tuesday after Draghi’s speech in Sintra, Portugal.
Spanish 10-year bond yields were down 11 bps, declining for the ninth straight week.
Italy’s 10-year bond yield, trading at 2.13%, was down some 18 bps this week, its third straight week of declines. (Reporting by Dhara Ranasinghe, editing by Larry King)