March 23 (Reuters) - Euro area government bond yields

sharply reversed their rise on Monday after President Donald

Trump said he will order the U.S. military to postpone any

strikes against Iranian power plants and energy infrastructure

for five days.

Trump said he has had good and productive conversations with

Iran.

Expectations for an end of the Middle East conflict eased

inflation fears and saw investors scale back their bets on

future European Central Bank rate hikes.

Oil prices fell by over 13% after Trump's remarks.

Money markets priced in a depo rate at 2.69% by year-end

, implying two ECB rate hikes and a 75%

chance of a third tightening move, from 2.94% earlier in the

session, implying 3 hikes and about a 70% chance of a fourth

move.

Germany's 10-year government bond yield, the

euro area's benchmark, was down 3 bps at 3.01%, after hitting

3.077% early in the session, its highest level since June 2011.