May 23 (Reuters) - Euro area benchmark Bund yields

dipped on Friday but were on track for their fifth straight

weekly rise, tracking moves in U.S. Treasuries as fiscal

concerns dominated market sentiment.

The Republican-controlled U.S. House of Representatives on

Thursday passed a sweeping tax and spending bill that could

saddle the country with trillions of dollars more in debt.

Germany's 10-year yield was down 2.5 basis

points (bps) at 2.62%, but still on track for a weekly rise of 3

bps, while the 30-year yields were about to end the

week 8 bps higher.

U.S. Treasury yields edged down in early London trade - with

the 10-year falling 3 bps to 4.52% -- after dropping

on Thursday as the recent selloff drew some buyers at more

attractive levels. The 10-year and 30-year yields

were set for their biggest weekly rise since early April, when a

U.S. Treasury selloff drove 10-year yields up 50 bps.

Money markets priced in the European Central Bank deposit

facility rate to be at 1.72% by year-end.

They also indicated more than a 95% chance of a rate cut in

June and an about 20% chance of a second easing move in July.

The depo rate is currently at 2.25%.

German 2-year yields, more sensitive to ECB

policy rates, were down 1.5 bps at 1.81%.

Italy's 10-year yield fell 2.5 bps to 3.64%. The

spread between Italian and German yields - a market gauge of the

risk premium investors demand to hold Italian debt - was at 99.5

bps.

;))