German 10-year bond yields head back towards one-month lows

* German industrial output falls 1.1 pct in June

* Bond yields dip across euro zone

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

LONDON, Aug 7 (Reuters) - Germany's benchmark 10-year government bond yield dipped towards recent one-month lows on Monday, as news of an unexpected fall in German industrial output supported a view that any unwinding of euro zone monetary stimulus is likely to be slow.

Industrial output in Germany, the euro zone's biggest economy, fell 1.1 percent in June from a month earlier, unexpectedly falling for the first time this year. That confounded analyst expectations for a 0.2 percent rise.

The data helped support sentiment in euro zone bond markets, which came under pressure on Friday after stronger-than-expected U.S jobs numbers revived expectations of a rise in interest rates from the Federal Reserve in December.

In the euro zone, expectations for a tightening in monetary policy sooner rather than later have been scaled back -- helping to push bond yields back down after a sharp sell-off in July.

Trading in money market futures suggests investors expect the European Central Bank to raise rates by December next year . That is a contrast to last month, when markets anticipated a rate hike as early as June 2018.

"Market participants realise that any discussion regarding QE (quantitative easing) tapering will only happen in the autumn, so the discussion has calmed down," said DZ Bank rates strategist Sebastian Fellechner.

Germany's 10-year government bond yield dipped 1 basis point to 0.46 percent -- within sight of a one-month low touched on Friday at 0.45 percent.

Other long-dated bond yields in the euro zone were 1-2 basis points lower, with geopolitical tension over North Korea's nuclear programme underpinning demand for safe-haven debt.

This week's thin bond supply schedule was also seen as a supportive. Austria will sell 1.1 billion euros of bonds on Tuesday, followed by a 4 billion euro sale of five-year German bonds on Wednesday.

"This will be the last euro zone government bond supply before a two-week hiatus that should prove a supportive factor for all issuers," Mizuho analysts said in a note.

DZ Bank's Fellechner added that investors were likely to pay attention to a release expected later in the day showing the breakdown of European Central Bank asset purchases in July.

In June, the ECB bought more than two billion euros of Italian and French bonds than it was supposed to, moving further away from a rule aimed at ensuring that its stimulus is evenly spread across the euro zone.

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(Reporting by Dhara Ranasinghe; Editing by Catherine Evans)