Jan 31 (Reuters) - Euro zone government bond yields fell

on Friday and markets ramped up bets on European Central Bank

rate cuts after economic data pointed to a bleak outlook.

Germany's unemployment rate rose at the start of the year,

as the weakness of Europe's biggest economy takes its toll in

the labour market.

French consumer prices increased slightly less than

anticipated in January, and German states released inflation

figures also showing cooling.

Germany's 10-year bond yield, the euro area's

benchmark, dropped 4 basis points (bps) to 2.48%.

Money markets priced in a depo rate at 1.93% in December

2025 from around 2.05% before data.

Germany's two-year bond yield, more sensitive to

ECB rate expectations, fell 7 bps to 2.13%.

Borrowing costs inched higher early in the session, after

falling the day before as market expectations for the ECB

monetary easing path were roughly unchanged after Thursday's

policy meeting.