LONDON, July 18 (Reuters) - German 10-year bond yields

held steady around their lowest in three weeks on Thursday as

traders waited to see whether the day's European Central Bank

meeting will throw up any surprises that will cause them to

reassess the monetary policy outlook.

The 10-year Bund yield, the benchmark for the

euro zone bloc, was little changed at 2.42%. It hit a three week

low of 2.408% on Wednesday.

The ECB is all but certain to keep interest rates unchanged

while signalling that its next move is still set to be a cut,

even if this guidance is likely to be vague and carry caveats.

The central bank lowered rates from record highs last month

in a move some policymakers considered rushed and the bank is

likely to be more cautious about a follow-up step, given

stubbornly high domestic inflation and wage growth.

Market pricing currently reflects expectations of around 45

basis points of further rate cuts from the ECB this year, with

another 25-bp move more likely than not by September's meeting -

October's is fully priced - and a reasonable chance of another

by December.

It will announce its policy decision at 1215 GMT, followed

by President Christine Lagarde's 1245 GMT news conference.

"Our baseline remains an ECB that reiterates a

data-dependent approach, which means no forward guidance for a

September cut," said ING analysts in a note

"Euro rates could see a nudge higher in this case as markets

seem to be looking for an ECB that is moving closer towards an

easing cycle."

Italy's 10-year yield was little changed​ at

3.71%, just off three-month lows and the gap between Italian and

German Bunds was steady at 129 bps, having

narrowed meaningfully since nudging above 160 bps in June on the

back of political uncertainty in Europe driven by the French

election.

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

sensitive to ECB rate expectations, was little changed at

2.77%.

(Reporting by Alun John; Editing by Emelia Sithole-Matarise)