Euro zone bond yields hold steady, focus on Trump tariffs

LONDON, Jan 22 (Reuters) - Euro zone bond yields were steady on Wednesday after dipping over the last two sessions in a sign of fragile investor relief that Donald Trump has held back from ramping up tariffs in his first days back as U.S. president.

Trump on Tuesday vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports. But he has stopped short of immediately imposing trade levies as he had promised during his campaign.

Germany's 10-year bond yield DE10YT=RR, the benchmark for the euro zone bloc, rose 0.5 basis points (bps) to 2.48%.

Italy's 10-year yield IT10YT=RR was little changed​ at 3.59%, and the gap between Italian and German bunds DE10IT10=RR widened 0.8 basis points to 110 bps.

Germany's two-year bond yield DE2YT=RR, which is sensitive to European Central Bank rate expectations, was little changed at 2.22%.

(Reporting by Harry Robertson
Editing by Gareth Jones)

((harry.robertson@thomsonreuters.com;))