LONDON, Sept 29 - European government debt futures were higher on Monday as the market looked forward to key U.S. manufacturing and labour data due later in the week for more clues about the state of the U.S. recovery. At 0614 GMT, the December Bund future was up seven ticks at 114.94. "I think we're still in a bullish trend, at least for a couple of days, and any weakness will be temporary. The stocks in the U.S. have been boosting bonds," said a Helsinki trader. "Any weakness will be temporary. But sentiment is very cautious as each indicator seems to have its own story."
On Friday, benchmark 10-year euro zone government bond yields hit six-week lows, extending this month's downward trend in the face of weak stock markets. Manufacturing figures from the U.S. Institute for Supply Management due on Wednesday are likely to reinforce the hard-hit sector's rebound in growth, but whether that improvement will reverse nearly three years of relentless layoffs is in doubt. The headline act, though, will be the U.S. Labor Department's comprehensive monthly payrolls data on Friday. Some traders are worried the market could face a rough slide if this week's reports on manufacturing activity and the labour market show stronger growth gradually leading to more jobs. The big question about the resilience of the U.S. economy's rebound revolves around the labour market and whether ongoing layoffs will undermine consumer spending.//