(Updates throughout)

By Amanda Cooper

LONDON, June 9 (Reuters) - Euro zone government bond

yields edged lower on Monday, stabilising after last week's

selloff, while investors watched for developments in scheduled

talks between top U.S. and Chinese trade officials in London.

The European Central Bank last week cut interest rates by 25

basis points (bps) to 2%, as expected, but signalled it may be

closer to the end of its current easing cycle than many had

previously expected.

On Monday, benchmark 10-year Bund yields fell

2.2 basis points to 2.543%, having risen 5.4 bps last week.

Two-year German yields also edged down 2 bps to

1.852% Schatz yields rose 9 bps last week, marking their largest

weekly increase since early March, when the German government

announced the biggest overhaul in spending in decades.

10-year Italian yields dipped nearly 3 bps to

3.474%, while 10-year French debt was yielding

3.217%, down 1.8 bps. French bond markets were severely rattled

a year ago when President Emmanuel Macron called a snap election

following European parliamentary elections in which his party

suffered dramatic losses.

A host of ECB officials are scheduled to speak this week,

including board member Isabel Schnabel.

ECB policymaker Peter Kazimir on Monday said the central

bank was nearly done with interest rate cuts and should watch

data over the summer to determine whether more tweaks are

necessary or not.

Traders are pricing in just one more rate cut for the

rest of this year from the ECB, down from roughly two a week

ago.

"The ECB is in a comfortable position with rates at the

middle of the expected neutral range and inflation moving

towards ECB's target," Jefferies strategist Mohit Kumar said.

"We are still keeping our view of one more rate cut in

September as we expect a slowdown in the macro picture over

summer months," he said.

Longer-dated global bond yields have risen sharply this

year, as investors everywhere have grown more concerned about

debt levels in developed countries, in particular.

German 30-year bond yields, which on Monday

were down 2 bps just below 3%, have risen by about 40 bps this

year to close to their highest since mid-2011. U.S. 30-year

Treasuries meanwhile are up nearly 20 bps at around 5%, nearing

their highest since 2007.

Investors are demanding higher premia to hold

longer-term bonds, but appetite for government debt has been

robust this year.

Barclays strategists noted late last week that euro area

banks in particular have been avid buyers of general government

debt this year, to the tune of 173.6 billion euros ($198

billion) in the first quarter of 2025 alone, with 85.5 billion

euros coming in the domestic markets.

"This was multiples higher than the demand seen in Q1 of

the previous five years," they said.

($1 = 0.8758 euros)