May 27 (Reuters) - Euro zone government bond yields edged lower on Monday ahead of key economic data after rising last week as markets scaled back expectations for monetary easing by the European Central Bank.
Investors will be focusing on the German consumer price index on Wednesday, along with French, Italian and euro area inflation figures and U.S. personal consumption expenditure price index data on Friday. The ECB's consumer expectations survey will be released on Tuesday, and the U.S. Federal Reserve's Beige Book on Wednesday.
Germany's 2-year government bond yield, more sensitive to policy rate expectations, was down 0.5 basis points (bps) at 3.08% in Monday morning trade, after hitting 3.124% on Friday, its highest since mid-November.
Money markets last priced in 57 bps of ECB monetary easing rate cuts in 2024, which imply two rate cuts and an around 30% chance of a third move by year-end.
Germany's 10-year yield, the bloc's benchmark, dropped 0.5 bps to 2.58%.
Italy's 10-year yield was down 0.5 bps at 3.88%.
The yield gap between Italian and German bonds , a gauge of the risk premium investors seek to hold bonds of the euro area's most indebted countries, was at 129 bps.
(Reporting by Stefano Rebaudo, editing by Christian Schmollinger)
