German bond yields at three week highs as investors await debt sales

LONDON, May 6 (Reuters) - Benchmark German government bond yields rose to their highest in three weeks on Tuesday as investors braced for debt sales from the United States and Germany.

German 10-year bond yields DE10YT=RR dropped nearly 30 basis points in April as investors took refuge in the market as a safe haven amid a searing selloff in U.S. Treasuries driven by tariffs that raised questions about the status of the world's biggest bond market.

But German yields have risen 10 bps so far in May as risk assets have recovered. On Tuesday, they were up 2 bps to 2.54%, their highest since April 14.

Focus was on debt sales. Germany was expected to reopen an outstanding 30-year bond by syndication after hiring banks on Monday, according to a lead manager, while the U.S. will auction $42 billion in 10-year notes.

Italian bond yields IT10YT=RR were also up 2 bps to 3.64%, putting the closely-watched spread they pay over German debt DE10IT10=RR at 107 bps.

Traders were pricing in more than a 90% chance of a rate cut from the ECB in June and roughly 60 bps of total cuts by the end of the year. EUESTECBF=ICAP

Investors will also examine final euro zone business activity data for April.