Euro zone yields steady, investors eye US inflation data, heavy bond sales

LONDON, Sept 22 (Reuters) - Euro zone government bond yields were steady in early Monday trade, with investors awaiting data on the Federal Reserve's preferred inflation gauge in a heavy week for bond sales.

Yields climbed last week after Germany unveiled plans to increase debt issuance and following policy decisions from the Federal Reserve and the Bank of England.

This week's U.S. data will be in focus, particularly Friday's release of the personal consumption expenditures (PCE) price index, a key input for shaping expectations on the Fed’s next policy steps.

A string of Fed policymakers are also scheduled to speak in the coming days, while the Swiss National Bank meets on Thursday, with markets betting it will keep its benchmark rate unchanged at 0%.

Germany's 10-year bond yield DE10YT=RR, the benchmark for the euro zone, was up 1 basis point at 2.7590%, while the U.S. 10-year Treasury yield US10YT=RR was at 4.1389%.

There will be around 30 billion euros ($35.26 billion) worth of bond sales this week, including new 30-year debt from the Netherlands and 10-year Italian paper, according to Commerzbank.

French 10-year yields FR10YT=RR climbed 0.9 basis points to 3.5652%, while Italy's 10-year yield IT10YT=RR was steady at 3.5696%.

French yields briefly traded above Italian yields last week for the first time, following a ratings downgrade of France's long-term creditworthiness.

"Bearish momentum may persist this week amid upbeat macro data and heavy supply, while recent rating actions support further convergence between Italian government bonds and French government bonds," Commerzbank said in a note.

At the longer end of the curve, Germany's 30-year bond yield DE30YT=RR rose 1.2 basis points to 3.3532%, while Italy's 30-year bond yield IT30YT=RR was steady at 4.5146%.

($1 = 0.8508 euros)