LONDON, March 9 (Reuters) - Euro zone government bond markets sold off but stock markets in the bloc rallied on Friday after a stronger-than-expected U.S. non-farm payrolls report.
The U.S. economy created 313,000 new jobs in February, recording its biggest increase in more than 1-1/2 years, but a slowdown in wage gains pointed to a gradual increase in inflation this year.
Euro zone bond yields rose after the data before pulling back slightly. Germany’s 10-year bond yield was last up 1.5 basis points at 0.64 percent.
The pan-European STOXX 600 index jumped to a session high, last up 0.5 percent, and Britain’s FTSE 100 rose 0.3 percent to a session high.
Sterling rose slightly against the dollar after the labour numbers were published, trading up 0.2 percent at $1.3845 . Against the euro, sterling rose 0.3 percent to 88.92 pence per euro as the rise in the dollar hit demand for euros. (Reporting by Dhara Ranasinghe, Kit Rees and Tommy Wilkes. Editing by Fanny Potkin)