Euro zone long-end bond yields tick up ahead of debt sales, US inflation data

LONDON, Sept 22 (Reuters) - Long-tenor euro zone government bond yields nudged higher on Monday as investors awaited data on the Federal Reserve's preferred inflation gauge and remarks from policymakers over a heavy week for euro zone government bond sales.

Germany's 10-year bond yield DE10YT=RR, the benchmark for the euro zone, was steady at 2.744% while the 30-year bond yield DE30YT=RR rose 1.5 basis points to 3.356%.

Other long-dated regional bond yields, like those for France and Italy, traded in line with their German counterpart with Italy's 30-year borrowing cost rising to a peak of 4.5320%, its highest since September 5.

The U.S. 30-year Treasury yield US10YT=RR was up 1 basis point at 4.766%.

"The long end has been moved around a lot and appears to be trying to find some form of fair value following greater confidence that the Fed will lower policy rates to neutral territory," said Samy Chaar, chief economist at Lombard Odier.

Euro zone bond yields had climbed last week after Germany unveiled plans to increase debt issuance and following policy decisions from the Federal Reserve and the Bank of England.

POWELL REMARKS IN FOCUS

Remarks from U.S. Federal Reserve officials, including Chair Jerome Powell, and U.S. personal consumption expenditures (PCE) price index data due on Friday will be in focus this week alongside the a loaded slate of euro zone bonds sales.

St. Louis Federal Reserve President Alberto Musalem said on Monday that there may be "limited room" for further reductions, after the Fed's 25 basis-point cut last week, given that inflation is above the Fed's 2% target.

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.

"A hawkish Fed has taken away the downward pressure on U.S. Treasury yields, which in our view opens the door to a stretch higher in euro rates," ING said in a note.

Elsewhere, government bond yields in Sweden also rose with the 10-year borrowing cost SE10YT=RR touching a peak of 2.656%, its highest since April, after the government unveiled an 80-billion crown ($8.5 billion) spending bonanza in its 2026 budget on Monday.

Money markets are tilted in favour of Sweden's central bank keeping its policy rate on hold next week while analysts at Goldman Sachs reckon that a 25 basis-point cut this month is likely to conclude the Riksbank's easing cycle.

The Swiss National Bank, meanwhile, meets on Thursday and is expected to keep its benchmark rate unchanged at 0% this week and throughout 2026, according to a majority of economists polled by Reuters.

Pan-European stock market operator Euronext ENX.PA announced on Monday the launch of a new series of futures products for Europe's main government bonds, such as France's 10-year OAT, the German Bund, and Italian government bonds.

Euronext said the new products would not only help investors deal with a period of high volatility in the European bond markets, amid political uncertainty in France and Germany's plans to ramp up debt issuance, but would also form a key part of Euronext's overall growth strategy.

($1 = 0.8508 euros)