LONDON, Aug 13 (Reuters) - Euro zone bond yields were

little changed on Tuesday as the recent volatility in financial

markets continued to ebb, with markets waiting for U.S.

inflation data for hints on when the Federal Reserve might ease

policy.

Focus is turning to today's U.S. producer price data and

tomorrow's consumer price figures, with markets on the lookout

for signs that inflation is slowing enough for the Fed to lower

rates next month.

Futures markets are currently evenly split on whether the

central bank will lower borrowing costs by 25 or 50 basis points

in September, having last week fully priced in a half-point move

when concerns about the U.S. economy sent bond yields and stocks

tumbling.

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

the euro zone, was steady at 2.227%. It hit its lowest since

January at 2.074% last week.

Germany's policy-sensitive two-year yield was

also little changed at 2.394%.

Italy's 10-year yield was 0.5 basis points (bps)

higher at 3.646%, keeping the yield gap between Italian and

German bunds at 141 bps.