* Britain, EU make progress in Brexit talks
* Congress averts U.S. government shutdown for now
* Euro zone bond yields broadly higher
* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
By Dhara Ranasinghe
LONDON, Dec 8 (Reuters) - Borrowing costs across the euro zone rose on Friday as a breakthrough in divorce talks between Britain and the European Union took the shine off safe-haven bonds.
The European Commission said on Friday enough progress had been made in Brexit negotiations with Britain for a second phase of negotiations to begin, ending an impasse over the status of the Irish border.
In the United States, meanwhile, Congress moved rapidly on Thursday to send President Donald Trump a short-term funding bill to avert a government shutdown this weekend.
That set the backdrop for world markets, with investors dumping safe-haven bonds and snapping up risk assets.
Germany’s 10-year bond yield rose 2 basis points to 0.31 percent, up from three-month lows hit this week at 0.29 percent. It was set to end the week marginally higher, which would be the first weekly rise in a month.
“Bund yields had slipped below 30 basis points this week, so prices were already at high levels and that was in part because of risk aversion,” said Daniel Lenz, rates strategist at DZ Bank.
“Now that risk aversion is abating as we see the first breakthrough in Brexit negotiations. We also appear to have a solution to U.S. budget talks.”
Britain’s 10-year bond yield jumped almost 6 basis points to 1.31 percent.
Most other long-dated bond yields in the bloc were also 1 to 2 bps higher on the day. Peripheral bonds , which tend to benefit from a pick-up in risk appetite, outperformed their higher-rated peers.
Focus was expected to turn to November U.S. jobs data later in the session.
According to a Reuters survey of economists, the Labor Department’s closely watched employment report is likely to show that nonfarm payrolls rose by 200,000 jobs last month after surging 261,000 in October.
The report probably will have little impact on expectations that the Federal Reserve will raise interest rates at its Dec. 12-13 policy meeting, but it could help shape the debate on monetary policy next year.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
Reporting by Dhara Ranasinghe, editing by Larry King