LONDON, Sept 15 (Reuters) - Euro zone government bond

yields got off to a steady start on Monday, with French debt

lagging after credit ratings agency Fitch cut France's long-term

rating on Friday, as the country grapples with a slowing economy

and ballooning debt.

This week is packed with macro risk events, including rate

decisions from the U.S. Federal Reserve, the Bank of England and

the Bank of Japan, all of which could help shape investor

appetite for euro zone debt.

French 10-year notes were up 1 basis point for a

yield of 3.516%, compared with a slight dip in benchmark German

yields to 2.708%. The premium investors demand to

own French, rather than German bonds, traded above 80 bps on

Monday, having risen from around 65 bps in the last month, as a

vulnerable French government headed towards last week's

confidence vote.

President Emmanuel Macron last week named loyalist Sebastien

Lecornu as France's fifth prime minister in under two years,

after predecessor Francois Bayrou was toppled in the

parliamentary confidence vote over the government's hugely

unpopular budget.

Fitch cut France's rating by one notch to A+ late on Friday.

"Our main worry for France comes from the upcoming rating

actions from Moody's and/or S&P. Currently, Moody's and S&P both

have France as AA-," Jefferies strategist Mohit Kumar said.

"If political uncertainty lingers, there is a risk of at

least one more downgrade. If France falls below AA- from two or

more rating agencies, we could see some forced selling from

institutional accounts. We remain negative on France spreads."

The European Central Bank last week left euro zone rates

unchanged, as expected, and lowered its longer-term inflation

projections.

In an interview with the Financial Times published on

Monday, newly appointed Austrian central bank governor Martin

Kocher said the ECB was likely at, or very close, to the end of

its easing cycle, a view echoed by euro zone derivatives

markets.

In addition to the slew of central bank policy decisions,

there is a hefty amount of new debt coming to market this week.

Germany, France, Spain, Slovakia, Greece and Finland all hold

auctions, for a total of 28 billion euros ($32.81 billion) in

supply, according to Commerzbank estimates.

($1 = 0.8533 euros)