* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
LONDON, Nov 19 (Reuters) - Euro zone bond yields were flat on Tuesday, with gains limited by prolonged trade war uncertainty and a third day of heightened political unrest in Hong Kong.
The German 10-year Bund yield was up less than half a basis point at -0.329%. French 10-year yields were similarly muted, recovering only slightly from last week, when Germany and France recorded the biggest declines in borrowing costs since September.
Spanish and Italian yields were lower, with the Italian 10-year yield hovering around 1.29% in early London trading .
"Profit-taking into year-end seems the dominant theme, and particularly foreign investors should be reluctant to recommit in the face of increasing political uncertainty in Spain as well as Italy," Commerzbank strategists wrote in a note to clients.
Trade tensions have also dominated sentiment in recent days. Market positioning means bond yields are especially receptive to positive trade-war developments, said Lyn Graham-Taylor, a fixed income strategist at Rabobank.
The next round of U.S. tariffs on Chinese goods takes effect on Dec. 15. Hopes for a trade deal are diminishing amid reports the United States is reluctant to roll back existing tariffs.
But in a positive sign for U.S.-China relations, the United States offered Huawei a 90-day license extension.
"The market has been trading trade-related headlines asymmetrically for quite a long time. If it's vaguely ambiguous or slightly positive it will be traded in quite a positive fashion - yields will sell off," Graham-Taylor said.
Economic data will be sparse. Italian industrial orders data for September are due at 900 GMT and euro area construction output data at 1000 GMT.
Minutes from the October meeting the Federal Reserve's federal open markets committee are due on Wednesday and the new president of the European Central Bank, Christine Lagarde, will speak in Frankfurt on Friday. Euro zone PMI data are also due on Friday. (Reporting by Elizabeth Howcroft, editing by Larry King)