March 24 (Reuters) - Euro area government bond yields

edged higher on Monday as investors awaited PMI data later in

the session while balancing economic downside risks from U.S.

tariffs against expectations for stronger growth stemming from

investment plans in Germany.

Markets will closely watch developments of negotiations

regarding a possible ceasefire in Ukraine as the Russian and

U.S. delegations began their talks in Riyadh, Saudi Arabia, on

Monday morning.

U.S. President Donald Trump still intends for new reciprocal

tariff rates to take effect on April 2, the White House said

last week.

Germany's 10-year government bond yields rose 2

basis points (bps) at 2.79%. They reached 2.746% on Friday,

their lowest level since March 5.

Markets priced in an ECB depo rate at around 2% at the end

of this year 2025 and at around the same

levels by July 2026.

Germany's 2-year yield, more sensitive to

European Central Bank policy rates, rose 1.5 bps to 2.14%.

Italy's 10-year yield was up 2.5 bps at 3.85%.

The gap between Italian and German government bond yields

was at 102 bps.