Euro zone bonds struggle for direction after Washington talks, eyes on Jackson Hole

LONDON, Aug 19 (Reuters) - Euro zone government bonds were in a holding pattern on Tuesday as traders looked ahead to a symposium of global central bankers later in the week, and after talks in Washington on ending Russia's war in Ukraine.

NATO Secretary General Mark Rutte told Fox News on Monday that U.S. President Donald Trump's meeting with Ukrainian President Volodymyr Zelenskiy and other European and NATO partners had been very successful.

In a social media post late on Monday, Trump said he had called Russian President Vladimir Putin and begun arranging a meeting between Putin and Zelenskiy, to be followed by a trilateral summit among the three presidents.

Analysts have said an end to the war could support risk appetite and weigh on safe-haven government bonds.

Germany's 10-year bond yield DE10YT=RR, the euro zone benchmark, was little changed at 2.774%. 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 steady at 1.966%.

Expectations for European Central Bank interest rates remain well-anchored in the near term, with markets expecting the central bank to remain on hold in September.

For the Federal Reserve, markets are currently pricing in around an 85% chance of a quarter-point rate cut at its September 16-17 meeting, little changed from the day before. The Fed's policy rate has been in the 4.25%-4.50% range since December.

Investors were awaiting the Fed's Jackson Hole Symposium where Chair Jerome Powell is due to speak on Friday.

Italy's 10-year bond yield IT10YT=RR was unchanged at 3.5949%, keeping the spread between Italian and German 10-year yields unchanged at 82 basis points (bps).