* German 10-year govt bond rise from 6-month lows
* Global risk sentiment recovers, oil firms
* Italian bond yields fall (Updates with German CDU news)
By Virginia Furness and Dhara Ranasinghe
LONDON, Dec 7 (Reuters) - German government bond yields rose from six-month lows on Friday as a recovery in oil prices and world stock markets took the shine off safe-haven debt markets after stellar price gains this week.
Global stock markets, hurt on Thursday after the arrest of the chief financial officer of Chinese smartphone-maker Huawei in Canada fanned fears about world trade tensions, were modestly firmer on Friday.
Oil prices also recovered from heavy losses the previous session, jumping more than 5 percent as big Middle East producers in OPEC agreed to reduce output to drain global fuel inventories and support the market.
That sparked selling of higher-rated government bonds, while lower-rated Italian debt markets benefited from a recovery in risk assets.
“What we’re seeing today is a reversal of yesterday’s move,” said Jan von Gerich, chief analyst at Nordea.
“The OPEC decision has also removed some uncertainty.”
German 10-year bond yields were up 3.5 basis points at 0.26 percent, rising from Thursday’s six-month low of 0.22 percent. It was set for its biggest one-day rise in just over a month.
That followed a five bps fall on Thursday, the biggest daily drop in over two months.
There was little immediate reaction in bond markets to news that Germany’s Christian Democrats have elected Annegret Kramp-Karrenbauer to replace Angela Merkel as party leader.
The decision moves her into pole position to succeed Europe’s most influential leader as chancellor.
Other high-grade euro zone sovereign bond yields rose between three and four basis points .
Yields briefly dipped after data showed U.S. jobs growth slowed in November, but soon headed back up - in line with U.S. Treasury yields.
The closely-watched non-farm payrolls report showed the U.S. economy created 155,000 new jobs last month. Economists polled by Reuters had forecast payrolls increasing by 200,000 jobs.
After the jobs data, traders of U.S. short-term interest-rate futures stuck to bets that the Federal Reserve will need to slow its pace of rate hikes sharply next year.
Italian government bond yields fell by up to six basis points, having risen by more than 10 bps on Thursday in the biggest daily jump since late October.
The Italy/Germany 10-year bond yield spread was at 288 bps after widening nearly 20 bps on Thursday. Italy’s 10-year bond yield was last down six bps at 3.14 percent.
Markets appeared relatively calm ahead of a possible confidence vote in parliament, where the ruling coalition has a large majority, to help accelerate the passage of the 2019 budget.
Two analysts said the vote had little bearing on the market.
“Both leading parties have a strong majority so it doesn’t have an impact,” said Daniel Lenz, rates strategist at DZ Bank.
However, Deputy Prime Minister Luigi di Maio had to deny that his party had called on Economy Minister Giovanni Tria to resign. (Reporting by Virginia Furness and Dhara Ranasinghe; Editing by Janet Lawrence and Gareth Jones)