LONDON, Aug 13 (Reuters) - Euro zone bond yields were little changed on Tuesday as recent volatility in financial markets continued to ebb, with markets waiting for the release of U.S. inflation data for hints on when the Federal Reserve might ease policy.

Focus is turning to Wednesday's U.S. consumer price figures, with investors looking for signs that inflation is slowing enough for the Fed to lower rates next month and by how much.

Futures markets are evenly split on whether the central bank will lower borrowing costs by 25 or 50 basis points in September, having last week fully priced in a half-point move when concerns about the U.S. economy sent bond yields and stocks tumbling.

"We're sitting and waiting for tomorrow," said Jens Peter Sørensen, director, fixed income research at Dankse Bank. "We have the expectation that the Fed is going to cut rates but it's more a matter of how much and for how long."

Germany's 10-year bond yield, the benchmark for the euro zone, was steady at 2.227%. It hit its lowest since January at 2.074% last week.

Bond yields tumbled last Monday as investors turned to the relative safety of government bonds following a collapse in global equities, as markets fretted about the strength of the economy following disappointing U.S. jobs data.

Stronger U.S. data since then has soothed those concerns and helped yields recover.

But while U.S. data is signaling a slowdown in growth rather than an outright recession, data from the euro zone continues to paint a more somber picture.

German investor morale worsened by more than expected in August, posting its strongest decline in two years, the ZEW economic research institute said on Tuesday.

"The economic outlook for Germany is breaking down," said ZEW president Achim Wambach.

Having cut rates in June, markets are assigning around a 90% chance that the European Central Bank moves again in September with a quarter-point cut, following a pause in July.

Germany's policy-sensitive two-year yield was down 2 basis points (bps) at 2.378% but remained above last week's low of 2.151%, its lowest since March 2023.

Italy's 10-year yield was 1 bp lower at 3.631%, narrowing the yield gap between Italian and German 10-year bonds to 140 bps. (Reporting by Samuel Indyk; Editing by Kirsten Donovan and Bernadette Baum)