German yields hold near one-month high after vaccine sell-off

* Bond yields steady after Monday's vaccine sell-off

* German 10-year yields near one-month high

* EU starts second bond sale to back SURE

* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr

By Yoruk Bahceli

AMSTERDAM, Nov 10 (Reuters) - Safe-haven German bond yields held near their highest level in a month on Tuesday as markets continued to digest news of a promising vaccine against COVID-19.

News that Pfizer's experimental vaccine is more than 90% effective based on initial trial results led to a turnaround in markets on Monday, with hopes that the shot will be a key step towards economic recovery hitting safe-haven assets including government bonds.

After seeing its biggest daily jump since March on Monday, Germany's 10-year yield was down about 1 basis point on Tuesday at -0.51%, but near the one-month high of -0.496% it touched the day before.

The yield on Italy's 10-year benchmark, which also sold off heavily on the vaccine announcement, was unchanged at 0.72%.

"There are still several reasons to be cautious and after the strong moves seen yesterday a period of volatility in yields is likely as investors better assess the situation," UniCredit analysts told clients.

Analysts at ING said investors should be mindful that there may be a long lag between the approval of the vaccine, which is not guaranteed, and the time when consumers feel confident to resume their usual habits.

Also in focus on Tuesday is the European Union, which started its second bond sale to back the SURE unemployment scheme. It will issue five and 30-year bonds, according to Refinitiv IFR.

This follows the first issuance to fund the scheme in early October, which raised 17 billion euros ($20.1 billion) and received the highest level of demand ever for a bond sale.

The European Central Bank's weekly bond-purchase data released late on Monday showed it did not speed up its pandemic emergency bond-buying meaningfully last week.

Analysts have been watching to see whether the ECB will up the purchases after the bank pre-committed to additional stimulus in December at its October meeting.

"It is becoming clear though that the ECB has not stepped up its pace after the dovish press conference," Christoph Rieger, head of rates and credit research at Commerzbank, told clients.

"The ECB's vaccine language that was inserted into the ECB policy statement as well as Lagarde's prepared remarks serves as catalyst and explains these 'corona unwind' moves."

The bank said at in October that prospects for the rollout of a COVID-19 vaccine would be among the information it would assess.

($1 = 0.8458 euros)

(Reporting by Yoruk Bahceli; Editing by Pravin Char)