* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
By Yoruk Bahceli
AMSTERDAM, July 9 (Reuters) - Euro zone bond yields held their ground on Thursday with investors' main focus expected to be any new developments on the European Union's recovery fund, which aims to help the region's economy recover from the coronavirus crisis.
Hopes are high that the 750 billion euro ($851.70 billion)fund will be approved at a European Union summit late next week. Designed to mostly offer grants to countries worst hit by the coronavirus, it has been one of the main drivers of a drop in Southern European borrowing costs led by Italy in the past few weeks.
On Wednesday, European Council President Charles Michel said the EU needed to reach an agreement quickly on the fund but much negotiation was still needed.
Euro zone finance ministers will meet at 1300 GMT to select their new leader, while German Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte will give a joint news conference in Berlin at 1830 GMT.
"We don't anticipate a fast agreement (little in the EU moves quickly), but would be cautious around putting too much weight on negative-sounding headlines, which are almost certain to be seen," Mizuho analysts told clients.
"Instead, we stick to our expectation for a slow but inexorable grind towards a consensus relatively close to the Franco-German proposal," they said, referring to an initial proposal which offered 500 billion euros in grants before the EU added 250 billion euros in loans to its plan.
On Thursday, Germany's 10-year yield was unchanged at -0.44%, close to one-week lows, while Italian 10-year yields were also unchanged at 1.28%.
On the data front, German exports rebounded 9% in May in another sign of recovering demand spurred by the lifting of lockdown measures, but rose less than the 13.8% expected in a Reuters poll.
In the primary market, Ireland is due to sell between 1 and 1.5 billion euros via the sale of 7, 10 and 30-year bonds.
($1 = 0.8806 euros) (Reporting by Yoruk Bahceli. Editing by Jane Merriman)