May 10 (Reuters) - Euro zone bond yields edged lower on

Friday catching up with a fall in U.S. Treasuries late on

Thursday, while investors' focus shifted to next week's U.S.

inflation data for clues on the Federal Reserve's policy path.

The outcome of the Bank of England policy meeting and U.S.

data on Thursday failed to affect market expectations for the

central banks' easing cycle.

Germany's 10-year government bond yields, the

bloc's benchmark, dropped 2.5 basis points (bps) to 2.47%.

Markets are pricing in 70 basis points (bps) of ECB rate

cuts in 2024, and 45 bps for the Fed

.

Italy's 10-year yield fell 4.5 bps to 3.79%, and

the yield gap between Italian and German bonds - a

gauge of the risk premium investors seek to hold bonds of the

euro area's most indebted countries - was at 131 bps.

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

rate expectations, was flat at 2.94%.