March 25 (Reuters) - Euro zone bond yields crept higher

on Tuesday ahead of a German business sentiment survey later in

the day and as traders saw signs of flexibility in U.S. tariffs

due next week.

U.S. President Donald Trump indicated on Monday that not all

of his threatened levies would be imposed on April 2 and that

some countries may get a break.

Markets saw that as a sign of flexibility, leading to a

rally in U.S. stock markets on Monday and a selloff in U.S.

bonds. Yields move inversely to prices.

German 10-year bond yield, the benchmark for the

euro zone bloc, rose 1.9 basis points to 2.792%.

Italy's 10-year yield was higher by 1.1 basis

points at 3.892%, and the gap between the Italian and German

10-year bonds stood at 109 bps.

Investors also await the Germany business climate survey for

this month due from the Ifo institute at 0900 GMT.

The data will provide a gauge of business morale after

Germany passed a landmark bill to massively boost infrastructure

and defence spending in Europe's largest economy, a move seen as

a positive for euro zone growth in the next few years.