Euro zone government bond yields steady at recent highs

LONDON, April 25 (Reuters) - Euro zone bond yields held steady near multi-month highs on Thursday after recent data suggested the European economy is picking up, and Spain's bonds traded largely in line with German peers after its prime minister suspended public duties.

Germany's 10-year bond yield, the benchmark for the euro zone, was down 0.8 basis points (bps) to 2.58%. It reached 2.599% in early trading, matching the previous day's five month high.

The main economic data release of the day is U.S. GDP data for the first quarter.

Spain's 10 year yield was flat on the day at 3.38% and the spread between that and Germany's was 78.8 bps, also little changed.

The country's Prime Minister Pedro Sanchez said on Wednesday he would step back from public duties "for a few days" to decide whether he wants to continue leading the government after a court launched a business corruption probe into his wife's private dealings.

​Italy's 10-year yield was down 1.6 bps at 3.94%, having hit a two month high on Wednesday, and the gap between Italian and German bunds was almost unchanged at 135 bps.

Germany's two-year bond yield, which is more sensitive to European Central Bank rate expectations, was little changed at 2.96%.