Germany's bund rose five basis points to -0.305. Other 10-year yields in the euro zone were also as much as five basis points higher.,.

Analysts attributed the move partly to the French data, but noted the market is likely to remain quiet ahead of Powell's speech. French industrial output rose 2.1% in May, its biggest monthly increase since November 2016.

Markets on Friday scaled back expectations of deep rate cuts by the Fed after better-than-expected U.S. jobs data. Nevertheless, rate cuts remain factored into bond prices this week and any indication from Powell on future monetary policy is keenly awaited.

Markets are now pricing in a 25-basis-point cut at the Federal Open Market Committee's next session on July 30-31. But the potential for disappointment is high, said Christian Lenk, rates strategist at DZ Bank.

"It will be pretty hard for Powell to meet all the expectations that are in the market," he said. "If you look at the fundamentals, the situation in the U.S. is not that bad that would justify a long series of rate cuts.

Germany is due to sell 4 billion euros of new bonds on Wednesday, and has set a 0% coupon on its new 10-year Bund, the Bundesbank said on Tuesday.

In a Q&A session on Twitter on Tuesday, the European Central Bank's chief economist, Philip Lane, reiterated that the ECB has the tools it needs to keep inflation on track towards its goal of just under 2 percent.

Risk appetite may also grow after U.S. and Chinese trade officials held a "constructive" phone conversation on Tuesday, according to White House economic adviser Larry Kudlow, marking a new round of talks after the world's two largest economies agreed to a truce in a year-long trade war.

Italy on Tuesday sold a 50-year bond with more than 80% of demand coming from foreign investors, led by Germany, the head of its debt management office told Reuters.