By Bhakti Tambe

MUMBAI, July 9 (Reuters) - Indian government bond yields

were little changed on Tuesday, with traders awaiting comments

from U.S. Federal Reserve Chair Jerome Powell later in the day

for hints on the timing of a potential rate cut.

The benchmark 10-year yield ended at 6.9883%,

following its previous close of 6.9911%.

U.S. yields also remained steady around the 4.30%-level

ahead of Powell's testimony before the Senate later in the day

and the House on Wednesday, which could give investors more

clues on the likely direction of rates.

A slew of soft labour market data in the U.S. has greatly

increased the chance of an interest rate cut in September to

about 80%, with traders betting on a total of two 25-basis-point

cuts for the whole of 2024.

Market participants are also awaiting key U.S. June

inflation data, due on Thursday, and India inflation print on

Friday.

India's consumer price inflation probably edged up in June,

snapping five months of declines, largely because of a jump in

vegetable prices caused by the damage to crops wrought by

extreme weather, according to a Reuters poll of economists.

The focus is also shifting to the newly elected government's

first union budget on July 23.

Prime Minister Narendra Modi's new government may tilt

towards, but not pivot to welfare spending, with a focus on

rural economy and job creation, economists at Goldman Sachs

said.

"Despite the unexpected electoral loss for the incumbent, we

do not expect a pivot to populism," analysts at Nomura said in a

note.

"Instead, a continued focus on capex and fiscal

consolidation is likely, including in the upcoming July budget,

where the excess Reserve Bank of India dividends are likely to

help the government retain the interim budget target of 5.1% of

GDP and possibly announce some consumption support."

(Reporting by Bhakti Tambe; Editing by Janane Venkatraman

)