* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr LONDON, June 21 (Reuters) - Euro zone government bond yields were broadly steady on Monday, while the U.S. yield curve flattened further overnight due to the Federal Reserve’s hawkish shift last week. The U.S. yield curve, measured as the spread between the U.S. two-year and 30-year Treasury yields, touched its lowest since late January overnight after the Fed last week signalled higher rates in 2023. The curve has been flattening as market participants bet that the Fed will act sooner to clamp down on inflation pressures if they persist. By European trading, investors had unwound some of that trade. Germany’s 10-year Bund yield edged slightly higher, and stood at -0.2% at 0840 GMT. The yield spread between U.S. and German 10-year bonds was at its narrowest since February. In the euro zone, a gauge of long-term inflation expectations - the five-year, five-year inflation forward - fell to its lowest since March, at 1.4987%. ECB President Christine Lagarde is due to speak before the European Parliament at 1415 GMT, with analysts expecting her to maintain the ECB’s dovish stance. “The ECB has provided ample reassurances that it will not withdraw from asset purchases any time soon,” wrote ING rates strategists in a note to clients. “Even after the Fed’s hawkish turn, we expect demand for higher yielding fixed income,” the ING analysts said. France and Spain’s 10-year yields were flat while Italy’s was up by around 2 bps . The Fed surprised some investors last week by anticipating two rate hikes in 2023, with St. Louis Fed President James Bullard fuelling the global market sell-off on Friday by saying that it was natural for the Fed to have “tilted a little bit more hawkish here to contain inflationary pressures.” Lagarde said on Sunday that ECB policymakers meeting this weekend had made “good progress” in reshaping the ECB’s strategic goals, including the role it plays in fighting climate change and a revised approach to inflation. Investors this week will also focus on the Bank of England’s monetary policy meeting on Thursday and the release of euro area flash PMI data on Friday. (Reporting by Elizabeth Howcroft; Editing by Ana Nicolaci da Costa) Our Standards: The Thomson Reuters Trust Principles.