LONDON, Aug 1 (Reuters) - German government bond yields

fell for a sixth day on Thursday, reflecting their longest

stretch of gains since November, after the U.S. Federal Reserve

signalled the likelihood of a rate cut as early as September,

which boosted Treasuries.

Fed Chair Jerome Powell noted that price pressures were now

easing broadly in the economy and that if coming data evolveed

as anticipated, support for cutting rates would grow.

Bund yields, the benchmark for the euro zone

bloc, fell 1.5 basis points to 2.289, heading for a sixth

straight day of declines, having ended July with a decline of 18

basis points. Yields move inversely to bond prices.

"The outlook (for the Fed monetary path) remains uncertain,

with the U.S. presidential election and resulting political

policy shifts adding to the uncertainty," said economists at

PIMCO, after arguing that the economic backdrop will probably

lead the Fed to cut rates several times, starting in September.

The spread between U.S. 10-year Treasuries and German Bunds

widened 2.5 basis points to 177 bps, reversing

much of Wednesday's 3.27-bp narrowing.

The Bank of England delivers its monetary policy decision

later in the day and markets see a 61% chance of a cut. Ten-year

gilt yields were down 2.5 bps at 3.95%, with their

premium over Bunds tightening 3 bps to 165.

The BoE looks in a position to cut interest rates after

holding them at a 16-year high of 5.25% for the past year,

though markets and economists are far from certain the British

central bank will take the plunge.

"While we think that the data doesn't provide clear signals

that inflation persistence is beaten, we also think that the

dovish BoE could be willing to tolerate and explain away some

upside strength to justify a cut," said BofA in a research note.

If the BoE should leave rates unchanged, then September will

be the month to watch.

Italian 10-year yields rose one basis point to

3.66%, leaving their premium over Bunds 2 basis

points wider at 137 bps.

France comes to market later with a long-term bond auction,

as does Spain.

"European government bond primary markets remain busy with

auctions scheduled in long-end OATs, where the auction size is

lower than usual but in line with the seasonal pattern,"

Commerzbank strategists said in a note about the French debt

auction.

The gap between French and German yields - a

gauge of the risk premium investors demand to hold French

government bonds - hit a fresh post-election high at 72.70 bps.

It widened recently as markets worried the parliament could

reverse President Emmanuel Macron's pension reform, increasing

public spending.