LONDON, Aug 22 (Reuters) - Euro zone bonds were little

changed on Friday as traders braced for a speech by Federal

Reserve Chair Jerome Powell at the Jackson Hole symposium for

clues on the U.S. central bank's monetary path.

The German 10-year bond yield, the benchmark for

the euro zone bloc, flattened at 2.75%.

Italy's 10-year yield was higher by 0.7 basis

points at 3.62%, and the gap between Italian and German bunds

widened 0.8 bps to 84.9 bps.

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

sensitive to European Central Bank rate expectations, held

steady at 1.97%.

Powell's speech, expected at 10 a.m. EDT (1400 GMT), will be

key as traders assess the chances of a September rate cut by the

U.S. central bank.

Changes in Fed rate expectations often influence other bond

markets given the scale of the U.S. economy, the world's

largest.

Money markets currently see a 70% chance of a 25-bps rate

cut at the Fed's next session in September. Earlier this week,

they saw a 85% chance for such a cut.

The drop in Fed cut expectations pushed Treasury yields

higher on Thursday.