Sept 16 (Reuters) - Euro zone government bond yields

edged lower on Monday as investors awaited the Federal Reserve

rate decision in a week packed with central bank policy

meetings.

Markets expect the Fed to start its easing cycle, while the

Bank of England and the Bank of Japan are considered likely to

hold.

Money markets fully priced 25 basis points of rate cuts by

the Fed this week and a 59% chance of a 50 bps move, according

to the CME FedWatch tool.

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

euro zone bloc, was down 2 basis points (bps) at 2.13%.

Italy's 10-year yield was lower by 1.5 bps at

3.50%, and the gap between Italian and German Bunds

- a gauge of the risk premium investors demand to

hold Italian government bonds - stood at 137 bps.

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

to changes in ECB rate expectations, dropped 2 bps to 2.19%.