Euro zone bond yields inch higher ahead of Fed meeting

LONDON, June 18 (Reuters) - Euro zone bond yields nudged higher on Wednesday as investors awaited the outcome of the Federal Reserve meeting later in the day for any hints about the timing of further rate cuts, and kept a wary eye on developments in the Middle East.

Germany's 10-year bond yield DE10YT=RR was up 1 basis point on the day at 2.55%, and its two-year yield was up a fraction at 1.87%. DE2YT=RR

Investors around the world will be watching the Fed closely, though the U.S. central bank is widely expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December.

Traders' focus will be on whether it gives any clues as to whether and when it might begin cutting rates again, though it is also likely to repeat that it can't give much guidance until the impact of Trump's import tariffs and fiscal policies become clearer.

Italy's 10-year bond yield was 2 bps higher at 3.54%. IT10YT=RR