* There will be no GVD/EUR report on Friday April 2 and Monday April 5 due to UK public holidays (Adds details, prices) AMSTERDAM, April 1 (Reuters) - Euro zone bond yields fell on Thursday as investors weighed the impact of extended lockdowns and central bank support against data pointing to signs of economic recovery. France announced late on Wednesday it would widen lockdown measures to the entire country starting Saturday, in the latest sign of the region’s struggles to keep the coronavirus pandemic in check. That topped dovish messaging in European Central Bank (ECB) President Christine Lagarde’s Wednesday interview with Bloomberg News, where she said investors could test the bank’s willingness to rein in rising borrowing costs “as much as they want”. An end to its pandemic bond buying scheme in 2022 was “not set in stone”, she added. ECB chief economist Philip Lane reinforced the message on Thursday, stressing euro zone inflation, which rose again in March, is driven by transient factors while underlying trends remain weak, meaning the bank needs to maintain copious support for the economy. Another of the bank’s policymakers, Jens Weidmann, said its three-week-old forecast for a 4% economic rebound in the euro zone was already in jeopardy due to a surge in COVID-19 infections. Against those headlines, U.S. President Joe Biden announced a $2 trillion-plus jobs plan on Wednesday, underscoring the virus recovery theme prevailing in markets. After spending the morning without clear direction, euro zone yields progressively lost ground. At 1521 GMT, Germany’s 10-year yield, the benchmark for the bloc, was down 3.6 basis points (bps) to -0.329% after posting its biggest quarterly gain since 2019. Bond yields move inversely with prices. “Fears that the authorities in the region are failing to contain the third wave of infections are coinciding with reports regarding the slow vaccine rollout in the Eurozone,” said Rabobank strategist Jane Foley. “Together these are undermining expectations regarding the economic recovery,” she added, noting that the rise in euro zone bond yields so far this year was seen more as a reaction to higher U.S. bond yields. Earlier on Thursday, data showed euro zone monthly factory activity growth soared at the fastest pace since the survey began in June 1997, but supply chain disruptions and renewed lockdowns in the region may rein it in soon. At its meeting in March, the ECB accelerated the pace of its bond buying, although without an increase in the size of the programme that just means the purchases will run out earlier. (Reporting by Danilo Masoni and Yoruk Bahceli; Editing by Larry King, Mark Potter and Alex Richardson)
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