LONDON, March 26 (Reuters) - Euro zone government bond yields fell slightly on Tuesday as investors waited for the first readings of March inflation data from the bloc and for U.S. price figures on Friday.
** Germany's 10-year bond yield, the benchmark for the euro zone, was last down 1 basis point (bp) at 2.361%. Yields move inversely to prices.
** Euro zone yields have fallen over the last week as central banks have talked more warmly about rate cuts, and after the Swiss National Bank lowered borrowing costs.
** Spain and France are among the euro zone economies to publish preliminary March inflation data this week. But the big event will be the U.S. PCE inflation reading on Friday.
** Germany's two-year bond yield, which is sensitive to European Central Bank rate expectations, was last 2 bps lower at 2.853%.
** Italy's 10-year bond yield was 1 bp lower at 3.685% , with the closely watched gap to Germany's 10-year yield at 131 bps.
** Yields remain higher for the year, as economies and inflation have been somewhat slower to cool than initially expected. (Reporting by Harry Robertson; Editing by Andrew Heavens)
