* Air strikes in Syria prompt global demand for safe assets
* Euro zone government bond yields broadly lower
* Greece and creditors agree on key elements of reforms
* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
(Recasts after U.S. data, updates prices)
By Abhinav Ramnarayan and John Geddie
LONDON, April 7 Investors sought the safety of
euro zone bonds on Friday sending yields to multi-week lows
after U.S. air strikes in Syria raised diplomatic tensions and
weak U.S. data cast doubt over the strength of the recovery in
the world's largest economy.
Benchmark German Bund yields fell immediately at the start
of European trading, following an earlier tumble in U.S.
equivalents to four-month lows, as an escalation of the U.S.
military role in Syria drew sharp criticism from Russia.
Russian Prime Minister Dmitry Medvedev said on Friday the
missile strikes on a Syrian airbase were one step away from
clashing with the Russian military.
German yields, which move inversely to the cash price, fell
further to five-week lows after data showed U.S. job growth
slowing sharply in March, well below expectations.
"Safe-haven flows are always affected by political events,
and when it affects countries where the U.S. and Russia are
interested, then investors become even more nervous," DZ Bank
strategist Daniel Lenz said.
Seeding further nervousness in world markets, a truck drove
into a crowd on a shopping street in the Swedish capital
Stockholm in what the country's prime minister said appeared to
be a terrorist attack.
German 10-year yields fell as much as 4 basis points to a
five-week low of 0.22 percent, and were trading
around 0.23 percent as markets came to a close.
Most other euro zone bond yields were lower on the day.
Elsewhere, Greece and its euro zone creditors agreed on
major elements of reforms needed to unlock new loans, with a
total of 2 percent of GDP of measures to be implemented in 2019
and 2020, the head of euro zone finance ministers said.
The yield on Greece's short-dated bonds maturing in April
2019 dropped 25 bps to 7.69 percent.
Later on Friday, ratings agency S&P Global is to review
France's credit rating, now AA with a stable outlook.
"I am not expecting any change, but there may be some hint
on what S&P could do if (Marine) Le Pen wins the presidential
elections, what implications it could have regarding the
rating," said Lenz.
Far-right leader Marine Le Pen has promised to try to take
France out of the single currency if she wins the two-round
presidential elections scheduled for April 23 and May 7.
The yield on France's 10-year government bond
fell as much as 3 bps to a one-month low of 0.87 percent.
(Additional reporting by Helen Reid; Editing by Jeremy Gaunt)