Euro zone government bond yields rose slightly on Tuesday as investors awaited possible clues about the European Central Bank monetary easing path from German economic data.

The ZEW Economic Research Institute will issue figures on German investor morale later in the session.

Borrowing costs dropped the day before, while media reports about potential candidates to serve in the U.S. administration of President-elect Donald Trump renewed concerns about tariffs that could hurt the bloc’s economy.

Germany’s 2-year yield, which is more sensitive to ECB interest rate expectations, was up one basis point (bp) to 2.14%, after falling 5 bps on Monday.

Money markets priced in a depo rate at around 1.9% in July , from around 2% the day before, while fully pricing in a 25 bps rate cut in December and a 20% chance of a 50 bps move.

Germany's 10-year government bond yield, the euro area's benchmark, was up 0.5 bps at 2.33%, after dropping 4 bps on Wednesday.

Italian 10-year government bond yield, the benchmark of the euro area’s periphery, rose 1.5 bps to 3.61%.

The spread between Italian and German 10-year yields – a gauge of risk premium investor demand to hold Italian debt – stood at 126.5 bps.

(Reporting by Stefano Rebaudo, editing by Tmothy Heritage)