(Updates prices)

By Samuel Indyk

LONDON, March 11 (Reuters) - Germany's 10-year bond

yield edged up on Monday after last week suffering its biggest

weekly fall since December, as central bank commentary left the

door open for the ECB and Federal Reserve to cut rates in June.

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

euro zone, was last up 3 basis points (bps) at 2.30%. It fell

14.5 bps last week, its biggest weekly drop in 12 weeks. It hit

2.233% on Friday, its lowest level since Feb. 2.

Yields fell across the globe as both Federal Reserve Chair

Jerome Powell and European Central Bank President Christine

Lagarde signalled that June would be the likely starting point

for their easing cycles.

"Rate cuts are arriving and that is going to be bullish for

the front part of the yield curve," said Althea Spinozzi, head

of fixed income strategy at Saxo Bank.

Germany's two-year yield, which is sensitive to

changes in policy rates, rose 3 bps to 2.77%. Bond yields move

inversely to prices.

Mixed U.S. labour market data on Friday supported those

favouring easing to begin in the summer, with the economy adding

more jobs than anticipated, but the unemployment rate rising and

average hourly earnings increasing at a slower rate.

"The employment report and recent Fed comments are

consistent with our view that the Fed could start cutting rates

in June," said Mohit Kumar, European economist at Jefferies.

"A further slowdown in inflation over the coming months

should give enough confidence to the Fed that they can take

their foot off the brakes."

U.S. inflation numbers on Tuesday should provide more

evidence that price pressures are fading, but with the Fed now

in the blackout period before their March 19-20 meeting, there

will be no commentary from policymakers.

In Europe, money market traders are also betting on the

first ECB interest rate cut in June, while around 100 basis

points of easing is priced this year, implying four

quarter-point cuts in 2024.

"The big question bondholders are asking themselves is

whether a faster deceleration in inflation might lead the ECB to

cut rates in April," said Saxo Bank's Spinozzi.

Elsewhere, Portuguese bonds were steady after the

centre-right Democratic Alliance (AD) won Sunday's general

election by a slim margin and is preparing to govern without an

outright majority while the far-right Chega warned of

instability if it is not included in government.

Portugal's 10-year government bond yield rose 4

bps to 2.76%, keeping the spread between Portuguese and German

10-year yields steady at around 63.5 bps.

"We do not expect the election result to have much market

impact after the recent upgrade," said Jens Peter Sørensen,

director, fixed income research at Danske Bank, referring to

S&P's sovereign upgrade which will allow Portugal's bonds to be

included in more bond indices.

"This should be positive for PGBs (Portuguese government

bonds) but also other peripherals that are next in line such as

Spain that are up for review on Friday by Moody's," Sørensen

said.