Euro zone government bond yields edge up before PMI data
July 24 (Reuters) -Euro zone government bond yields edged up on Wednesday before the release of PMI data from Germany, France and the euro area, which might affect the expectations for the direction of the European Central Bank monetary policy.
Investors will closely watch developments in the U.S. election campaign as Vice President Kamala Harris is expected to be the party's candidate to face Republican Donald Trump.
Germany's 10-year bond yield DE10YT=RR, the benchmark for the euro zone bloc, rose 0.5 basis points (bps) to 2.44%. It was at 2.46% before Joe Biden abandoned his reelection bid.
Money markets keep pricing an around 80% chance of two 25 bps rate cuts by the European Central Bank by year-end. EURESTECBM3X4=ICAP
Italy's 10-year yield IT10YT=RR was up 2 bps at 3.78%.
The yield gap between Italian and German 10-year government bonds DE10IT10=RR - a gauge of the risk premium investors demand to hold Italian debt – was at 132 bps after hitting 120 bps last week, a level seen before French President Emmanuel Macron called for snap elections.
Germany's two-year bond yield DE2YT=RR, which is more sensitive to European Central Bank rate expectations, was little changed at 2.76%.
Reporting by Stefano Rebaudo, editing by Andrew Heavens
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