* Demand for so-called safe haven bonds rises
* Barcelona van attack kills 13, wounds scores
* Concern over Trump’s ability to pass economic plan
* White House denies rumour Gary Cohn quitting
* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
By John Geddie
LONDON, Aug 18 (Reuters) - Demand for highly-rated euro zone bonds increased on Friday as investors focused on a deadly attack by a suspected Islamist militant in Barcelona and the difficulties U.S. President Donald Trump faces in passing his economic agenda.
The yield on Germany’s benchmark government bond fell 2 basis points to 0.41 percent as did those on other so-called ‘safe haven’ bonds which perform in times of stress.
Meanwhile, yields rose slightly on southern European bonds in the likes of Spain and Portugal in a global retreat from riskier assets.
Earlier on Thursday, U.S. equivalents matched a six-week low of 2.182 percent.
“Risk aversion is up following terrorist attacks in Spain and Trump concerns,” Commerzbank analyst Michael Leister said.
Spain mounted a sweeping anti-terror operation on Friday after the suspected Islamist militant drove a van into crowds on a popular tourist thoroughfare in Barcelona, killing 13 people before fleeing, in what police suspect was one of multiple planned attacks.
The death toll could rise, with more than 100 injured, authorities said. Similar attacks have killed well over 100 people in Nice, Berlin, London and Stockholm.
Concerns have grown too over Trump’s ability to push through his economic goals, such as tax cuts and infrastructure spending, following the exodus of executives from two prominent business councils in reaction to his response to clashes last weekend in Charlottesville, Virginia.
Trump on Thursday decried the removal of pro-slavery Civil War Confederacy monuments, which have fuelled U.S. racial tensions, stoking worries that some of his key policy staffers and aides may quit.
Chief among them were rumours that Gary Cohn, director of the National Economic Council, would resign. The White House denied those rumours.
“Those rumours are in our view the embodiment of the market’s nervousness,” Mizuho strategist Peter Chatwell said.
The fall in yields extended a move that started earlier in the week after minutes from U.S. Federal Reserve and European Central Bank meetings showed policymakers were cautious about withdrawing monetary stimulus too quickly.
Dallas Fed President Robert Kaplan on Thursday said the Fed should be “very patient and judicious” as it considers whether to raise interest rates.
Later on Friday, Greece’s credit rating will be reviewed by Fitch. Greece is rated CCC by Fitch and analysts at DZ Bank said the country may get as much as a two-notch upgrade back into B territory.
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
Editing by Richard Balmforth