* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
LONDON, Oct 31 (Reuters) - Euro zone bond yields fell on Thursday, following Treasuries after the U.S. Federal Reserve cut interest rates on Wednesday.
The U.S. central bank cut its benchmark rate by a quarter of a percentage point to 1.50%-1.75% to help the U.S. weather the global trade war. It also dropped a reference in its policy statement to acting "as appropriate" to sustain economic expansion - language considered a sign of future rate cuts.
Chairman Jerome Powell said some of the risks that had convinced Fed officials lower rates were needed, if only as insurance, seemed to abate in recent weeks.
Most euro zone 10-year bond yields were down around 3.5 basis points in early trade . Germany's benchmark yield was -0.39%, following U.S. Treasuries, where the 10-year yield was down 6.5 bps over the last two days.
Attention now turns to European data releases, with euro zone flash inflation numbers and a preliminary gross domestic product report due at 1000 GMT. Preliminary French inflation figures came in at 0.9% year-on-year, less than the 1.0% forecast by a Reuters poll.
"For the euro zone it's counting down to the GDP reading for the third quarter ... following yesterday's French and Belgian readings, you might say risks are tilted to the upside, but we remain cautious, of course, because weakness in the euro zone is coming from Germany," said KBC strategist Mathias van der Jeugt.
Belgian and French GDP growth figures releases on Wednesday both exceeded expectations.
Germany's 10-year yield was set for its biggest monthly jump since January 2018, up 18 bps in October, as demand for safe-haven assets eased on expectations that Britain would avoid a no-deal Brexit. (Reporting by Yoruk Bahceli, editing by Larry King)