European shares recover as bond selloff eases, euro falls
* FTSEurofirst 300 index ends flat after late recovery
* Bonds erase losses, euro turns lower
* Metro, Morrisons slip; Beiersdorf gains
By Atul Prakash and Francesco Canepa
LONDON, May 7 (Reuters) - European shares closed flat after a late recovery 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 bounce, ending 0.5 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 caused deflation fears to recede. 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 declines 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...