July 24 (Reuters) - Euro zone government bond yields

edged up on Wednesday before the release of PMI data from

Germany, France and the euro area, which might affect the

expectations for the direction of the European Central Bank

monetary policy.

Investors will closely watch developments in the U.S.

election campaign as Vice President Kamala Harris is expected to

be the party's candidate to face Republican Donald Trump.

Germany's 10-year bond yield, the benchmark for

the euro zone bloc, rose 0.5 basis points (bps) to 2.44%. It was

at 2.46% before Joe Biden abandoned his reelection bid.

Money markets keep pricing an around 80% chance of two 25

bps rate cuts by the European Central Bank by year-end.

Italy's 10-year yield was up 2 bps at 3.78%.

The yield gap between Italian and German 10-year government

bonds - a gauge of the risk premium investors

demand to hold Italian debt - was at 132 bps after hitting 120

bps last week, a level seen before French President Emmanuel

Macron called for snap elections.

Germany's two-year bond yield, which is more

sensitive to European Central Bank rate expectations, was little

changed at 2.76%.