LONDON, April 17 (Reuters) - Euro zone bond yields fell

slightly on Wednesday after climbing to a 1-1/2-month high the

previous day, as traders assessed central banks' possible next

moves following robust U.S. data.

This week's fall in demand for safe assets pushed bond

yields higher, while surprisingly strong U.S. retail data on

Monday caused investors to further trim bets on Federal Reserve

rate cuts this year, and by extension causing a slight reduction

in European Central Bank (ECB) rate cut pricing.

Germany's 10-year bond yield, the benchmark for

the euro zone, was last 2 basis point (bp) lower on the day at

2.465%, after hitting the highest level since late February on

Tuesday. It has risen since Friday's tumble to 2.318% when

investors snapped up safe assets as tensions between Israel and

Iran ratcheted higher. Yields move inversely to prices.

On Tuesday, top U.S. central bank officials, including

Federal Reserve Chair Jerome Powell, backed away from providing

guidance on when interest rates may be cut and said monetary

policy needed to be restrictive for longer.

On the same day, ECB President Christine Lagarde said the

bank would cut rates soon, barring any major surprises, and

argued the impact of geopolitical events on commodity prices had

not been very significant so far.

"European data remains on the weak side, the disinflation

trend is still intact in Europe and ECB is set to cut rates in

June," said Mohit Kumar, chief Europe economist at Jefferies.

Longer-dated yields fell slightly in the afternoon session.

Emmanouil Karimalis, European rates strategist at UBS, said the

market is keeping an eye on oil prices and their inflation

implications.

Oil has risen to around its highest since October on

the back of Middle East tensions and an uptick in global growth,

but was down around 0.9% on Wednesday.

Italy's 10-year bond yield was last 4 bps lower

at 3.874%, after rising to its highest level since March 1 on

Tuesday.

The German 2-year bond yield, most sensitive to

expectations for policy rates, was last 1 bp higher at 2.942%,

after briefly rising to an almost one-week high.

Analysts said investors will be watching for a slew of

central banks speakers due later in the day, including Lagarde

and Bank of England Governor Andrew Bailey.

Data on Wednesday confirmed euro zone inflation slowed

across the board last month, reinforcing expectations for a ECB

interest rate cut in June, even as rising energy costs and a

weak euro currency cloud the outlook.