LONDON, March 21 (Reuters) - Euro zone bond yields were

set for their biggest weekly fall since November on Friday as

traders mulled the risks of tariffs and a U.S. economic

slowdown, after shooting higher earlier in March on Germany's

spending plans.

Investors were also watching Germany's Bundesrat upper house

of parliament, which is set to vote on Friday on a dramatic

increase in spending. Analysts said the bill is likely to pass

that final hurdle.

Germany's 10-year bond yield, the benchmark for

the euro zone bloc, fell 2 basis points (bps) to 2.761% and was

on track to fall 11 bps for the week. Yields move inversely to

prices.

Analysts at Barclays, Commerzbank and ING said concerns

about U.S. President Donald Trump's April 2 deadline for tariff

decisions was weighing on sentiment and pushing investors

towards the safety of government bonds.

German yields nonetheless remain 39 bps higher for the month

after the announcement of the country's new spending plans - to

be funded largely through bond markets - sent yields soaring.

Italy's 10-year yield was lower by 1 bp at

3.836%, and the closely watched gap between Italian and German

bond yields widened slightly to 107 bps.

Germany's two-year bond yield, which is more

sensitive to European Central Bank rate expectations, was 1 bp

lower at 2.158%.