LONDON, July 10 (Reuters) - Euro zone bond yields dipped

on Wednesday on concerns after rising the previous day about

monetary policy and politics, with traders waiting for the

second day of U.S. Federal Reserve Chair Jerome Powell's

testimony before Congress.

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

the euro zone bloc, fell 3 basis points (bps) to 2.55% after

climbing 4 bps on Tuesday. Yields move inversely to prices.

France's 10-year bond yield was down 5 bps to

3.211%, taking the gap between French and German yields 3 bps

lower to 66 bps. The so-called spread has been in focus during

France's election period.

Italy's 10-year yield was lower by 5 bps at

3.907%, and the gap between Italian and German yields

narrowed 3 bps to 136 bps.

Germany's two-year bond yield, which is more

sensitive to European Central Bank rate expectations, was 2 bps

lower at 2.909%.

(Reporting by Harry Robertson; Editing by Arun Koyyur)