LONDON, April 3 (Reuters) - Euro zone bond yields fell slightly on Wednesday, after rising sharply the previous day, as investors waited for March inflation data for the bloc.
** Germany's 10-year bond yield, the euro zone benchmark, was last down 3 basis points (bps) at 2.382%. Yields move inversely to prices. ** The yield rose 12 bps on Tuesday, catching up after a holiday with a sharp rise in U.S. yields on Monday, which was driven by stronger-than-expected survey data. ** Data due at 0900 GMT (1100 CEST) is expected to show inflation held steady at 2.6% year-on-year in March, although some economists think Tuesday's soft regional price data means the figure could come in lower. ** Germany's two-year bond yield was little changed at 2.811%. The yield is sensitive to European Central Bank interest rate expectations and has risen 39 bps this year. ** Italy's 10-year bond yield was down 3 bps at 3.777%. The closely watched gap between Italian and German 10-year yields stood at 138 bps, up from a more than two-year low of 115 bps in mid-March. (Reporting by Harry Robertson; Editing by Andrew Heavens)
