European bond yields edge lower ahead of US inflation data

By Joice Alves

LONDON, Sept 10 (Reuters) - Euro zone government bond yields edged lower on Wednesday as investors awaited U.S. inflation data that could help define the size of a Federal Reserve rate cut next week.

French yields were steady after French President Emmanuel Macron named loyalist Sebastien Lecornu as prime minister.

U.S. producer price inflation data due later on Wednesday, followed by the consumer price inflation report on Thursday, will give investors more clarity on the extent of the impact from U.S. tariffs on prices, after a dismal jobs report last week cemented bets on the Fed cutting rates at its September 16-17 policy meeting.

In France, the choice of Lecornu, a one-time conservative protege who rallied behind his 2017 presidential run, indicated Macron's determination to press on with a minority government that will not rip up his pro-business reform agenda, under which taxes on business and the wealthy have been cut and the retirement age raised.

German 10-year bond yields DE10YT=RR, the benchmark for the euro zone bloc, fell 2.2 basis points to 2.64%.

The French 10-year yield FR10YT=RR was little changed at 3.47%. The yield gap between 10-year French and German government bonds FR10YT=RR, DE10YT=RR — a market gauge of the risk premium investors demand to hold French debt — was at 83 bps, LSEG prices showed.

Italy's 10-year yield IT10YT=RR was lower by 1.4 basis points at 3.50%.