Euro zone bond yields steady near multi-month highs, central bank meetings on deck

LONDON, March 17 (Reuters) - Euro zone government bond yields were little changed on Tuesday as markets took a breather even as oil prices rose again, ahead of a few days chock-full of central bank decisions.

Brent crude prices were up about 3% on Tuesday as the Strait of Hormuz remained almost fully closed to shipping, fuelling further worries about higher energy costs and rising inflation.

Against this backdrop, the Federal Reserve announces policy on Wednesday. The European Central Bank, Bank of England and Bank of Japan follow on Thursday.

"Markets are bracing themselves for the central bank avalanche kicking off tomorrow," said Commerzbank rates strategist Erik Liem in a note.

Expectations for near-term rate cuts from the Fed and BoE have been dashed by the spike in energy prices since the start of the war, while markets have moved to price in tighter policy from the ECB by the end of the year.

The hawkish global repricing has pushed up euro zone bond yields to their highest in months, with the bloc's economy particularly sensitive to rising energy prices.

Germany's 10-year bond yield, the benchmark for the euro zone, was little changed on the day at 2.948%, although it remained close to its highest level since October 2023, reached on Friday, of 2.994%.

The 2-year yield, which is sensitive to changes in ECB policy expectations, was down 0.5 basis points at 2.404%. It has risen more than 40 bps since the outbreak of the Middle East conflict. (Reporting by Samuel Indyk; Editing by Alex Richardson)