July 15 (Reuters) - Euro area government bond yields

edged lower on Tuesday as investors await U.S. inflation data

later in the session which could provide clues about the Federal

Reserve's monetary path.

The U.S. figures will show how tariffs affected inflation in

June after data from previous months came in cooler than

economists had forecast.

German 10-year yield, the euro area's benchmark,

dropped one basis point (bp) to 2.71%.

The 30-year yield was down one bp at 3.24%,

after reaching 3.26% on Monday, its highest since October 2023.

The 2-year - more sensitive to expectations for European

Central Bank policy rates - was down 0.5 bps at 1.87%.

The German yield curve flattened slightly, with the spread

between 10-year and 2-year yields down 0.5 bps at

84 bps. It climbed 6.1 bps the day before in its biggest daily

rise since April 7 after a jump in Japanese yields. nL1N3TB08N

The yield curve steepens when long-dated yields increase

more quickly than the short-dated ones.

Markets have priced in an ECB terminal rate roughly

unchanged at around 1.75-1.80%, while

yields on longer maturities have risen amid expectations of a

significant increase in German fiscal spending.

Italy's 10-year yields dropped 1.5 bps to 3.61%,

with the spread between BTPs and Bund yields at 88 bps. It hit

84.20 bps earlier this month, its lowest level since March 2015.