* ECB rate cut supports spread tightening against Bunds
* Bund futures fall, but stay close to record highs
* Investors book profits before U.S. non-farm payrolls
By Marius Zaharia
LONDON, May 3 (Reuters) - French, Austrian and Belgian bond yields hit record lows and other euro zone yields also fell on Friday, as bets on further monetary easing increased appetite for assets offering higher returns than German debt.
Other bonds' yield spreads over German Bunds were expected to narrow further after the European Central Bank cut its refinancing rate on Thursday and President Mario Draghi said it was ready to cut the deposit rate below zero.
Debt markets showed little reaction after ECB policymaker Ewald Nowotny said a negative deposit rate - charging banks for holding their money with the ECB - was not a near-term option.
"Inflation fears are basically vanishing and investors are buying the whole euro zone fixed income. (Bets of further easing) are pretty much intact," said Christian Lenk, rate strategist at DZ Bank in Frankfurt.
French, Austrian and Belgian 10-year yields fell to record lows of 1.65 percent, 1.435 percent, and 1.903 percent, respectively.
The Italian/German 10-year yield spread narrowed to its tightest since July 2011 at 251 basis points. Spanish 10-year yields fell below 4 percent for the first time since Oct. 2010, and equivalent Portuguese yields hit 2-1/2 year lows.
"The ECB was very dovish yesterday ... It overdelivered," one trader said. "Obviously that's supportive for spreads."
Bund futures fell 31 ticks to 146.85, with investors positioning for the U.S. nonfarm payrolls report by booking profits. The future hit a record high on Thursday.
April payrolls, due at 1230 GMT, are expected to have increased by 145,000 jobs - too little to quash fears the U.S. economy is losing momentum.
"If we see disappointing U.S. non-farm payrolls and we get fears that the economy is weak as well, then maybe not today, but in the next few days we will break into uncharted territory in German yields as well," DZ Bank's Lenk said.
German 10-year yields were 2 bps higher at 1.18 percent, just above last July's record low of 1.126 percent.