Euro zone government bond yields edged higher on Monday after a volatile week of trading on worries around the U.S. economy, as investors awaited U.S. inflation data to gauge the extent of interest rate cuts by the Federal Reserve this year.

The German 10-year bond yield, the benchmark for the euro zone bloc, rose 2.5 basis points to 2.247%. It had sunk to a seven-month low of 2.074% on last Monday.

Euro zone bond yields have recovered from multi-month lows hit last week when worries about slowing U.S. jobs growth, an unravelling of Japanese yen-funded trades and disappointing earnings among large tech firms sent investors scurrying to the perceived safety of bonds.

Investors will focus on U.S. consumer prices data on Wednesday, with softer-than-expected numbers likely to spark chatter of a bigger 50-basis-point (bps) rate cut by the Fed in September. Odds for such a move stand currently at 47%, as per CMEGroup's Fedwatch tool.

Germany's two-year bond yield, which is more sensitive to European Central Bank rate expectations, rose 2.9 bps at 2.41%.

Italy's 10-year yield was higher by 2 bps at 3.655%, and the gap between Italian and German bunds narrowed 3 basis points to 141 bps.

(Reporting by Sruthi Shankar in Bengaluru; editing by Mark Heinrich)