May 27 (Reuters) - Euro zone government bond yields

edged lower on Monday ahead of key economic data after rising

last week as markets scaled back expectations for monetary

easing by the European Central Bank.

Investors will be focusing on the German consumer price

index on Wednesday, along with French, Italian and euro area

inflation figures and U.S. personal consumption expenditure

price index data on Friday. The ECB's consumer expectations

survey will be released on Tuesday, and the U.S. Federal

Reserve's Beige Book on Wednesday.

Germany's 2-year government bond yield, more

sensitive to policy rate expectations, was down 0.5 basis points

(bps) at 3.08% in Monday morning trade, after hitting 3.124% on

Friday, its highest since mid-November.

Money markets last priced in 57 bps of ECB monetary easing

rate cuts in 2024, which imply two rate

cuts and an around 30% chance of a third move by year-end.

Germany's 10-year yield, the bloc's benchmark,

dropped 0.5 bps to 2.58%.

Italy's 10-year yield was down 0.5 bps at 3.88%.

The yield gap between Italian and German bonds

, a gauge of the risk premium investors seek to

hold bonds of the euro area's most indebted countries, was at

129 bps.