June 26 (Reuters) - Euro zone government bond yields

edged up on Wednesday as investors were on hold before inflation

data from Italy, France and Spain due on Friday and the first

round of the French elections during the weekend.

German 10-year bond yield, the benchmark for the

euro area, rose 1.5 basis points (bps) to 2.43%, after dropping

one bp the day before.

The gap between French and German 10-year yields

-- a gauge of risk premium investors demand to

hold French government bonds - was 70 bps. It hit its highest

level since February 2017 at around 80 bps the day after

President Emmanuel Macron called for snap elections.

Italy's 10-year yield was unchanged at 3.94%,

with the Italian-German yield gap at 150 bps.

Germany's two-year bond yield, which is more

sensitive to European Central Bank rate expectations, was up 0.5

bps at 2.81%.

Markets have priced in a cumulative 68 bps of ECB monetary

easing this year, implying an additional 25

bps rate cut and a 70% chance of a third move.