Euro zone bond yields hover near one-month highs ahead of data

May 13 (Reuters) - Euro zone bond yields hovered near one-month highs on Tuesday as investors pared back bets on interest rate cuts by the European Central Bank after a faster-than-expected de-escalation in U.S.-China trade war eased worries about a sharp global slowdown.

Germany's 10-year yield, the euro area's benchmark, rose 1.1 basis point to 2.65%, while the two-year yield, more sensitive to ECB policy rates, was up 1 bp at 1.93%. Both were at levels last seen on April 10.

Money markets priced in an ECB deposit facility rate at 1.82% by year-end up from 1.67% late Friday. The deposit rate is currently at 2.25%.

Investors will look to Germany's ZEW survey and U.S. Consumer Prices Index for April later in the day wherein latter could show the economic impact of trade war on U.S. consumers.

Euro zone bonds yields tracked U.S. counterparts higher on Monday after weekend talks between U.S. and Chinese negotiators yielded a 90-day pause in their tit-for-tat trade spat and sharply lowered the tariffs the world's top two economies had imposed on each other.

Italy's 10-year yield rose 1.8 bps to 3.70%, leaving the spread between Italian and German yields - a market gauge of the risk premium investors demand to hold Italian debt - at 100 bps.

(Reporting by Medha Singh in Bengaluru; Editing by Amanda Cooper)