European shares recover as bond selloff eases, euro falls
* FTSEurofirst 300 index falls 0.2 percent
* Bonds erase losses, euro turns lower
* Metro, Morrisons slip; Beiersdorf gains
By Atul Prakash and Francesco Canepa
LONDON, May 7 (Reuters) - European shares recouped most of their daily losses to trade modestly lower on Thursday, as a selloff in government bonds eased and the euro gave up its gains against the dollar, partly helped by some estimate-beating U.S. data.
Germany's DAX index, which is heavily export-oriented and benefits from a weak euro, led the recovery, trading 0.2 percent higher.
The euro, which had earlier hit a 10-week peak against the dollar, weakened after the U.S. reported fewer initial jobless claims than expected and German government bond yields fell .
This week, a rebound in oil prices suggested any threat of deflation is receding. That in turn suggested the U.S. Federal Reserve will raise interest rates sooner than expected, despite mixed economic data, which triggered sell-offs in bonds and shares.
The sell-offs were exacerbated by the unwinding of positions in euro zone equities and bets against the euro built up since the European Central Bank began its quantitative easing programme in March. Continuación...