LONDON, Sept 25 (Reuters) - Euro zone bond yields were

little changed on Wednesday after falling during the two

previous sessions as investors positioned for more rate cuts

from the European Central Bank.

Weak European survey data, a downbeat German business morale

report, and a fall in U.S. consumer confidence have added

momentum to bets that the ECB could lower rates again in

October, after two previous 25 basis point cuts this year.

Germany's 10-year bond yield, the benchmark for

the euro zone bloc, rose 0.5 basis points (bps) to 2.14% after

falling 9 bps across the previous two sessions. Yields move

inversely to prices.

Italy's 10-year yield rose 0.3 bps to 3.48%, and

the gap between Italian and German yields stood at

133 bps.

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

to European Central Bank rate expectations, was up 0.5 bps at

2.1%, after falling 16 bps across Monday and Tuesday.

Investors have been keeping a close eye on French yields,

which yesterday rose above Spain's for the first time since 2008

due to concerns about the new government's ability to tackle the

budget deficit.

The gap between French and German 10-year yields

was last at 77 bps, up from around 70 bps two

weeks ago. It shot to its highest level since 2012 above 85 bps

during France's parliamentary elections.