Euro zone bond yields steady as markets digest inflation data

LONDON, July 16 (Reuters) - Euro zone government bond yields held steady on Wednesday, as markets pour over U.S. inflation figures released Tuesday that suggested tariffs are pushing up prices and sent U.S. Treasury yields to their highest in more than a month.

The June CPI data out of the U.S. on Tuesday showed and increase of 0.3% and spurred investors to slightly scale back their bets on Federal Reserve rate cuts.

German 10-year yields, the euro area's benchmark, were unchanged at 2.71% on Wednesday, hovering a fraction away from a nearly four-month high of 2.737% scaled on Monday.

The two-year yield - more sensitive to expectations for European Central Bank policy rates - was down 1 bp to 1.86% .

The German 30-year yield was unchanged at 3.23%, having risen to its highest level since October 2023 on Monday, touching 3.26%.

Elsewhere, UK CPI data earlier showed Britain's annual rate of consumer price inflation unexpectedly rose to its highest in over a year, at 3.6% in June.

Euro-centric data on Wednesday include the euro zone May trade balance, final Italian CPI and U.S. wholesale inflation. (Reporting by Lucy Raitano; Editing by Amanda Cooper)