European bond yields little changed ahead of inflation data, Jackson Hole summit

LONDON, Aug 20 (Reuters) - Euro zone government bond yields were little changed on Wednesday as traders awaited euro zone inflation data and the outcome of a symposium of global central bankers later in the week.

Germany's 10-year bond yield DE10YT=RR, the euro zone benchmark, was down about 2 basis points (bp) at 2.734%. It hit a 4-1/2 month high of 2.787% on Monday. Yields move inversely with prices.

Germany's two-year yield DE2YT=RR, which is sensitive to changes in interest rate expectations, was down 1 bp at 1.947%.

This week, euro zone bond yields have been in a holding pattern ahead of an annual symposium of global central bankers in Jackson Hole, Wyoming, and after talks in Washington on ending Russia's war in Ukraine.

Fed Chair Jerome Powell is due to speak at that summit on Friday.

Euro zone inflation data, due at 0900 GMT, is also awaited.

Data showed on Wednesday that UK inflation rose to the highest since early 2024 at 3.8%.

Markets expect the European Central Bank will hold interest rates at 2% at its September meeting.

In the U.S., futures imply around an 85% chance of a quarter-point rate cut at the Fed's September 16-17 meeting, little changed from the day before. The Fed policy rate has been in the 4.25%-4.50% range since December.

Italy's 10-year bond yield IT10YT=RR was 1.5 bps lower at 3.568%, keeping the spread between Italian and German 10-year yields at 83 bps.