* ECB holds central bank forum in Sintra, Portugal
* Investors wait for more clues on rate outlook
* Most bond yields flat to lower
* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
By Dhara Ranasinghe
LONDON, June 18 (Reuters) - Most government bond yields in the euro zone were steady on Monday, pausing after a hefty fall late last week after the European Central Bank signalled it would keep interest rates low well beyond the end of its massive stimulus scheme.
A three-day ECB forum kicks off in Sintra, Portugal and gives ECB policymakers the opportunity to give markets further guidance on their plans to wind down quantitative easing later this year. ECB chief Mario Draghi speaks later in the day.
The ECB last week said its unprecedented asset purchases scheme would finish at the end of this year, although interest rates would remain low through the summer of 2019.
That dovish rates trajectory has boosted sentiment in bond markets, with Italian bond yields last week posting their biggest weekly falls since 2012.
“In our view, bond bulls have gotten a bit carried away by the dovish twist to the ECB’s plan to phase out net quantitative easing,” said Martin van Vliet, senior rates strategist at ING.
“As such, we see a risk of this week’s ECB rhetoric being interpreted less dovishly and hence hold a bearish bias on euro zone rates, albeit a mild one given the renewed focus on trade tensions,” he added.
U.S. President Donald Trump on Friday said he was pushing ahead with hefty tariffs on $50 billion of Chinese imports, while Beijing immediately vowed to respond in kind.
Trade war fears should lend some support to safe-haven bond markets, analysts said.
In early Monday trade, most 10-year bond yields were flat to a touch lower on the day.
Italian bond yields continued to edge down, with two-year bond yields down 3 basis points at 0.64 percent.
They are now trading at levels seen before a violent sell off on March 29 sent them to five-year highs as fears of a snap election that could turn into a de facto referendum on Italy’s euro membership gripped markets.
In Germany, the benchmark 10-year Bund yield was flat at 0.40 percent with focus on political developments in the euro zone’s biggest economy.
Germany’s Interior Minister Horst Seehofer said on Sunday a row between his Bavarians and Chancellor Angela Merkel is serious but can be overcome, a signal that he may compromise to avoid a full-blown German coalition crisis.
Bavaria’s Christian Social Union (CSU) decides on Monday whether to start implementing a plan drawn up by Seehofer to reject migrants who have already registered in other EU states.
Reporting by Dhara Ranasinghe; Editing by Toby Chopra