Eurozone bond markets remain stable as investors rely on orderly Brexit

* Bond yield on the periphery of the euro zone tmsnrt.rs/2ii2Bqr

By Virginia Furness

LONDON, Jan 30 (Reuters) – Eurozone bond yields remained firm on Wednesday after UK lawmakers rejected a Parliament proposal to prevent a potentially chaotic Brexit from being traded, which the markets seem reluctant to sell. to integrate.

Bond investors paused after the vote and before key data from the euro zone, the Federal Open Markets Committee press conference and the resumption of trade negotiations between China and the United States, which should take place later Wednesday.

British lawmakers on Tuesday urged Prime Minister Theresa May to reopen a Brexit treaty with the EU to replace a controversial deal on the Irish border – and promptly received a categorical rejection of Brussels.

At the same time, the Parliament rejected a proposal to end a potentially chaotic "no agreement" exit by forcing May to seek a deadline in Brussels if it fails to secure an agreement from lawmakers. .

The eurozone bond market is somewhat immune to Brexit noise, said Christoph Rieger, exchange rate strategist at Commerzbank.

"Given the UK amendments and what (President of the European Council, Donald) Tusk said, this combination increases the risk of a messy Brexit. The market is reluctant to quantify this scenario, "said Rieger. "The market continues to believe that reason will prevail. This morning, it seems pretty fantastic to arrive at such a scenario. "

Investors bought German Bunds ahead of Tuesday's vote. German 10-year bond yields were last traded at 0.192%, close to levels negotiated late Tuesday.

British 10-year government bond yields fell 1.4 basis points to 1.255% at the start of trading.

Although Goldman Sachs, as well as others, have understood the chances of an increase in the Brexit without a transaction, bond yields in the euro area have remained virtually unchanged.

Investors are also focusing on the upcoming euro area data and the US Federal Reserve meeting.

"We expect the meeting to be an opportunity for (Fed chief Jeremy Powell) to convey the Fed's break message," wrote Mizuho's strategist in a note.

Commerzbank Rieger said he was expecting a discussion on the stocktaking as a result of Wall Street Journal reports that the Fed plans to end its balance sheet earlier.

Before German inflation and retail sales figures, the data showed that the French economy had performed slightly better than expected in the fourth quarter, rising by 0.3%.

Stronger growth data could put the European Central Bank rate hike back on the agenda.

Elsewhere, Italian government bond yields remained virtually unchanged, despite reports that Deputy Prime Minister Matteo Salvini would be under pressure to force early elections.

The yield spread of 10-year Italian bonds on Germany briefly touched its tightest level of the month at 240 basis points before rising to 244 basis points.

The 10-year-long Greek government bond yields are down after Tuesday's strong bond sales to their lowest level since August, at 3.958%. Greece sold Tuesday a five-year government bond via syndication, with a demand of more than 10 billion euros. (Report by Virginia Furness, edited by Andrew Cawthorne)