* Euro zone yields slip 2 bps, German yields hits -0.6%
* PMI manufacturing December data signals rebound
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
LONDON, Jan 4 (Reuters) - Euro zone government bonds yields slipped early on Monday, as investors traded cautiously amid rising coronavirus cases in the region.
The market showed little reaction to surveys showing euro zone manufacturing activity increased at its fastest pace since mid-2018 in December.
The rise in safe-haven bonds came as riskier stock markets also increased. Investors are balancing optimism around the rollout of COVID-19 vaccines with concerns that rising infections could herald tighter restrictions.
"As flows return to the market, recent events should be quickly priced in," said Mizuho strategists, referring to rising coronavirus cases and new travel restrictions in Europe.
The benchmark 10-year German government bond yield fell 3 basis points to -0.606%. Other core bond yields also fell by similar amounts.
In southern Europe, yields eased by between 2 to 4 basis points .
Manufacturing surveys in Asia showed factory activity in the region continued to bounce back from the COVID-19 shock, though Chinese factory activity growth slowed in December. (Reporting by Tommy Wilkes; Editing by Ana Nicolaci da Costa)
