LONDON - Euro zone government bond yields edged higher in early trading on Tuesday and the gap between ‍German and ‍American yields narrowed slightly, reversing the previous day's moves, as some worries ​subsided about Fed independence - at least in the short term.

Germany's 10-year yield, the benchmark ⁠for the euro zone, was last up 2 basis points at 2.82%, reversing a ⁠similar-sized decline a ‌day earlier.

The 10-year U.S. Treasury yield was up 1 basis point at 4.20% ahead of U.S. inflation data.

U.S. yields rose ⁠in early trade on Monday after Federal Reserve Chair Jerome Powell said the Trump administration had threatened him with criminal prosecution, though markets stabilised after the move was condemned by former Fed chiefs and criticised by key ⁠members of the president's Republican ​Party.

Barring any news on that front, the inflation numbers should be the main event of the ‍day for U.S. Treasuries and euro zone bonds as well.

There were some European actions affecting markets ​on Monday as well. ING analysts said details published by the second-largest Dutch pension fund, PFZW, covering a new hedging strategy caused the European yield curve to flatten.

The Dutch occupational pension system, the European Union's largest, is transitioning to a new system that investors had thought would add to pressure on long-term government bonds.

But ING said announcements such as PFZW's could challenge speculative positions built up around those assumptions and cause curves to flatten, at least in the near term.

Yield ⁠curves flatten when the gap between longer ‌and shorter-dated yields narrows; German 2-year yields dropped less than 1 bp on Monday.

French and Italian 10-year yields also rose around 2 bps on Tuesday to ‌3.53% and ⁠3.45%, respectively.

There is also substantial issuance planned by European countries on Tuesday, including Germany ⁠and Italy.

(Reporting by Alun John; Editing by Thomas Derpinghaus)