High-rated euro zone debt falls as immediate concerns over Syria recede
* Bunds fall as concerns over military attack against Syria ease
* Global stock markets also supported by Chinese data
* Ten-year Spanish/Italian yield spread at zero
By Ana Nicolaci da Costa
LONDON, Sept 10 (Reuters) - High-rated euro zone debt fell on Tuesday as receding concerns of imminent military action against Syria and upbeat Chinese data supported global stock markets at the expense of safe-haven assets.
Ten-year German bond yields rose to 2 percent, as did those on other low-risk euro zone bonds, including French, Dutch, Belgian and Austrian.
U.S. President Barack Obama said on Monday he saw a possible breakthrough in the crisis with Syria after Russia proposed that its ally could hand over chemical weapons for destruction, offering a path that averts planned U.S. military strikes.
"At least what this means is that there could be further delays and even no military action at all. That scenario is at least opening up," Elwin de Groot, senior market economist at Rabobank said.
German Bund futures fell 52 ticks to 137.10, pushing 10-year yields 4.7 basis points higher to 2 percent.
They have risen more than 80 basis points since this year's lows and hit a 1-1/2 year high of 2.059 percent on Friday.
The fall in German Bunds came as global stock markets were also underpinned by data showing China's industrial output growth and retail sales were better than expected in August.
"We had fairly decent numbers out of China this morning ... that seems to suggest the Chinese economy is bottoming out or maybe gaining a little bit of momentum there," de Groot said.
Equivalent French yields were 4.6 basis points higher at 2.60 percent, also after data showed an unexpected drop in French industrial output in July.
In the periphery, Italian bonds continued to struggle with growing political tensions. Ten-year Italian yields were 1.5 bps higher at 4.54 percent.
A close ally of Silvio Berlusconi warned on Monday that his party could pull out of Prime Minister Enrico Letta's government if a Senate committee refuses to delay a decision on whether to expel the media mogul from parliament.
The cross-party committee, held its first meeting on Monday and must vote on whether Berlusconi can remain a lawmaker after being convicted last month of tax fraud.
The premium offered by 10-year Spanish bonds over their Italian counterparts reached parity.
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