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

lower in early trading on Thursday, as a strong U.S. Treasury

auction in the previous session offered support to global

government bonds.

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

bloc, was down 1 basis point at 2.62%. It hit a six-week top of

2.668% earlier in the week, but has since been gradually moving

lower.

Euro zone investors remain on the sidelines as they await

the outcome of U.S.-EU trade talks, leaving markets in a holding

pattern until a deal is reached.

EU trade chief Maros Sefcovic said on Wednesday that good

progress had been made on a framework trade agreement and a deal

may even be possible within days.

In the meantime, the U.S. bond auction, which took place

after the European markets closed on Wednesday, remained the

main driver, albeit in quiet trading.

The Treasury saw strong demand for a $39 billion sale of

10-year notes, indicating that concerns over investors stepping

away from the market appear so far to be unfounded, and sending

U.S. yields lower.

Italy's 10-year yield, the benchmark for the European

periphery, was broadly trading in line with Germany's, last down

1 basis point at 3.54%.