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* Euro zone periphery government bond yields http://tmsnrt.rs/2ii2Bqr
LONDON, Aug 1 (Reuters) - Core euro zone bond yields inched up from all-time lows on Thursday after U.S. Federal Reserve Chairman Jerome Powell tempered bets on more rate cuts after the central bank's first cut in more than a decade.
Ten year bund yields fell sharply ahead of the Fed meeting to hit new record lows of -0.442%, and remained close to this level at -0.428% in early trade.
The Federal Reserve cut interest rates on Wednesday, but the head of the U.S. central bank said the move might not be the start of a lengthy campaign to shore up the economy against risks including global weakness.
"Let me be clear it's not the beginning of a long series of rate cuts," Powell said in a news conference after the Fed released its latest policy statement. At the same time, he said, "I didnt say its just one rate cut."
U.S. Treasury yields rose after the announcement and were seen three basis points higher at 2.051%.
In the U.S., shorter-dated yields rose as traders scaled back positions on future rate cuts, while longer-dated yields fell on the Fed's muted inflation outlook and the halting of its balance sheet normalization two months early.
Mizuho rates strategist Peter McCallum noted that despite Powell's reference to "mid-cycle adjustment," the United States' vast corporate debt and close to contraction manufacturing sectors suggest a much weaker outlook.
"This insurance cut looks very unlikely to be enough to raise inflation or materially prolong the cycle," he said.
"The market should look through this 25 basis point cut, they have wasted ammunition and we think Treasuries will continue to be supported at the long end."
Other 10-year yields in the bloc were around two basis points higher,.
In the euro zone the focus is on the Spanish and Italian manufacturing PMIs ahead of the final releases for France, Germany and the euro zone.
A reading of China's Purchasing Managers' Indexes (PMI) showed manufacturing activity contracting for a second consecutive month, while export driven economies in North Asia - Japan, South Korea and Taiwan - have been in pain for longer.
Supply is expected from Spain and France with the former looking to raise up to 4.5 billion euros of new debt, while France is looking to sell up to 6 billion euros of bonds. (Reporting by Virginia Furness; Editing by Janet Lawrence)