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Euro zone bond yields rise as trade war fears ebb, ECB in focus

* Bond yields up 1-4 bps, stocks up as trade war fears wane

* Italy bonds steady after post-election selloff

* Focus turns to Thursday's ECB meeting

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

LONDON, March 6 (Reuters) - Euro zone bond yields rose on Tuesday as fears of a global trade war ebbed, taking the shine off safe-haven debt as eyes turned to this week's ECB meeting for clues as to how and when the bank will withdraw its hefty stimulus programme.

Italy's government bonds steadied after a selloff on Monday, sparked by a surge in support for anti-establishment parties in Sunday's inconclusive national election.

As investors awaited further news on the make-up of the next government in Italy, the euro zone's third biggest economy, Thursday's European Central Bank meeting shifted into focus.

Policymakers are likely to discuss dropping their easing bias - a stipulation that asset buys could be increased if necessary - but a broader revision of the bank's policy guidance is likely to happen later, possibly during the summer, sources close to discussions told Reuters last week.

A strong economy means the ECB is widely expected to end its 2.55 trillion euro stimulus scheme by year-end, confident that inflation will at some point rise slowly.

"The ECB is going to be presenting growth forecasts that are likely to be stronger, but will be at pains to stress that the move away from monetary easing will be delicately done and slowly," said Peter Chatwell, head of euro rates strategy at Mizuho.

Low inflation remains a key reason for the cautious stance. Data last week showed euro zone inflation slowed to a 14-month low at 1.2 percent, and a key market gauge of long-term expectations on Monday dipped below 1.70 percent to its lowest level this year.

Most bond yields across bloc were up 1-2 basis points.

Germany's benchmark 10-year Bund yield was up 2 bps at 0.65 percent, pushing away from five-week lows hit on Monday at around 0.60 percent.

Investor worries about an imminent trade war eased as U.S. President Donald Trump faced growing pressure from political allies to pull back from proposed steel and aluminium tariffs. That boosted stock markets and dented demand for fixed income.

Italy's 10-year bond yield was steady at around 2.08 percent , allowing the gap over German peers to narrow to 143 bps after a brief, sharp widening following Sunday's election.

Analysts have been surprised by the relatively subdued bond market reaction to the ballot, predicting uncertainty about the make-up of the next government would likely weigh on Italian bonds in the coming weeks.

"All else equal, the risk of a populist government has increased compared with before the weekend so I would have expected much more weakness in peripheral spreads," said ABN AMRO senior fixed income strategist Kim Liu.

"I would actually expect that weakness in coming days and weeks as developments unfold." (Reporting by Dhara Ranasinghe; editing by John Stonestreet)