Jan 15 (Reuters) - Euro area benchmark Bund yields edged

lower on Wednesday, breaking a 10-day rising streak, as

investors awaited U.S. consumer price inflation figures later in

the session.

Strong economic data and fears that U.S. President-elect

Donald Trump's policies could boost inflation have driven yields

up on both sides of the Atlantic since early December.

Germany's 10-year government bond yield dropped

1.5 basis points (bps) to 2.61% after hitting a fresh 7-month

high at 2.63%.

Germany's 2-year bond yield, more sensitive to

European Central Bank rate expectations, fell 2 bps to 2.3%

after hitting a fresh 2-1/2-month high at 2.323%.

Money markets priced in a European Central Bank deposit

facility rate at over 2.1% at the end of 2025, from 1.8% in

early December.

Italy's 10-year yield was down 1.5 bps at 3.82%.

The gap between Italian and German yields -- a

gauge of the risk premium investors demand to hold Italian debt

-- held steady at around 120 bps.

The yield spread between French and German yields

stood at 84 bps, after French Prime Minister

Francois Bayrou on Tuesday opened the door to renegotiating a

disputed pension reform in a bid to win over left-wing lawmakers

he needs to pass the 2025 budget. Such a move could increase

market concerns about the government's ability to curb a

burgeoning public deficit.