LONDON - Euro zone bond yields inched higher on Tuesday as investors waited for testimony from Federal Reserve Chair Jerome Powell, days after a weak jobs report pointed to a slowdown in the U.S. economy.

Germany's 10-year bond yield, the benchmark for the euro zone bloc, rose 1 basis point (bp) to 2.533%. Yields move inversely to prices.

The German benchmark yield has fallen over the last week as data have suggested the U.S. economy is slowing, adding to hopes that the Fed can cut rates this year and bolstering expectations of further reductions from the European Central Bank.

France's 10-year bond yield was up 2 bps at 3.195% after Sunday's election resulted in a hung parliament with an unexpectedly strong showing from the left-wing grouping. It fell 4 bps on Monday after the results were announced.

The closely watched gap between French and German borrowing costs, which rose to the highest since 2012 in late June at 85 bps on fears of a far-right victory, held steady at 66 bps.

Powell is set to testify to Congress on Tuesday and Wednesday, ahead of U.S. inflation figures on Thursday.

"Whereas in the U.S. we see the rate-cutting narrative picking up momentum, in the eurozone the direction is less evident," Michiel Tukker, senior European rates strategist at ING, said.

"The data in the eurozone has simply been more mixed regarding the direction of the economy, with headline inflation coming down, services inflation and wage growth remaining stubborn, and labour markets showing few signs of deterioration."

Italy's 10-year yield was higher by 3 bps at 3.919% after falling for the previous two sessions, and the gap between Italian and German yields widened 2 bps to 139 bps.

Germany's two-year bond yield, which is more sensitive to ECB rate expectations, was little changed at 2.911%.

(Reporting by Harry Robertson; Editing by Andrew Heavens)