German 2-year bond yields near six-week low ahead of auction

* Germany to sell 4 billion euros of 2-year Schatz bonds

* 2-year yields hover near six-week lows

* Euro zone PMI, GDP data due out

* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr

LONDON, Aug 1 (Reuters) - Germany's short-dated bond yields held near recent six-week lows on Tuesday, ahead of a 4 billion euro sale of two-year Schatz paper later in the day.

Concerns about a scaling back of the European Central Bank's 2.3 trillion euro stimulus scheme have pushed up German longer-dated bond yields since a speech by ECB chief Mario Draghi in Portugal in late June. But two-year bonds yields have given up initial rises to head back down.

That's partly because demand for central bank buying for ECB stimulus remains skewed towards shorter-dated paper in Germany, the euro zone's biggest economy and its benchmark bond issuer. This has put downward pressure on yields, which move in the opposite direction to the price.

In addition, analysts say a rally in the euro has lifted demand for euro-denominated assets, with peripheral bonds and shorter-dated German debt benefiting the most.

The common currency is trading near 2-1/2 year highs against the dollar and is up around 13 percent so far this year.

"We think the continued euro strength is slowly creeping in to core euro zone government bond price action, and has been an important factor allowing these markets to withstand the positive core CPI surprises on Friday and yesterday," analysts at Mizuho said in a note, referring to inflation data from the euro area.

Germany's two-year Schatz yield was flat in early Tuesday trade at around minus 0.675 percent, pinned near six-week lows hit the previous session.

Ten-year bond yields across the euro zone were little changed on the day ahead of economic data due later this session.

Manufacturing activity survey data and a flash estimate of euro zone economic growth in the second quarter are due out.

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(Reporting by Dhara Ranasinghe; Editing by Gareth Jones)