Sept 20 (Reuters) - Euro zone government bond yields

were on track to end the week slightly higher as the U.S.

Federal Reserve policy meeting and jobs data fuelled appetite

for risky assets.

Investors expect rates to fall further as the Fed won its

battle against inflation.

German 10-year Bund yields were flat at 2.19%,

and on track to end the week four basis points (bps) higher.

Bond prices move inversely with yields.

Money markets have fully priced in a 25 basis point (bp)

rate cut by the European Central Bank in December and see about

a 25% chance of a further move this year.

Germany's 2-year Schatz yields were flat at 2.22%

and on track to close the week up one bp.

They were yielding 3 bps less than German 10-year debt

. They hit their highest level since November 2022

on Sept. 11 when they were yielding 2.60 bps less.

Italian 10-year yields were down 1.5 bps at

3.54%, with their premium over Bunds at 134 bps.