LONDON, July 9 (Reuters) - Euro zone bond yields inched

higher on Tuesday as investors waited for testimony from Federal

Reserve Chair Jerome Powell, days after a weak jobs report

pointed to a slowdown in the U.S. economy.

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

the euro zone bloc, rose 1 basis point (bp) to 2.533%. Yields

move inversely to prices.

The German benchmark yield has fallen over the last week as

data have suggested the U.S. economy is slowing, adding to hopes

that the Fed can cut rates this year and bolstering expectations

of further reductions from the European Central Bank.

France's 10-year bond yield was up 2 bps at

3.195% after Sunday's election resulted in a hung parliament

with an unexpectedly strong showing from the left-wing grouping.

It fell 4 bps on Monday after the results were announced.

The closely watched gap between French and German borrowing

costs, which rose to the highest since 2012 in late June at 85

bps on fears of a far-right victory, held steady at 66 bps.

Powell is set to testify to Congress on Tuesday and

Wednesday, ahead of U.S. inflation figures on Thursday.

"Whereas in the U.S. we see the rate-cutting narrative

picking up momentum, in the eurozone the direction is less

evident," Michiel Tukker, senior European rates strategist at

ING, said.

"The data in the eurozone has simply been more mixed

regarding the direction of the economy, with headline inflation

coming down, services inflation and wage growth remaining

stubborn, and labour markets showing few signs of

deterioration."

Italy's 10-year yield was higher by 3 bps at

3.919% after falling for the previous two sessions, and the gap

between Italian and German yields widened 2 bps to

139 bps.

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

sensitive to ECB rate expectations, was little changed at

2.911%.