Euro zone yields mixed, focus on US Treasuries, economic data

Nov 18 (Reuters) - Euro zone borrowing costs were mixed on Monday, with U.S. Treasury yields settling around their recent highs while a weak economic outlook weighed on expectations for European Central Bank policy rates.

Markets awaited data on euro area negotiated wages on Wednesday and PMIs on Friday.

Analysts see U.S. yields roughly unchanged in the near term as markets have priced a so-called red sweep, with Donald Trump as the new U.S. president and the Republican Party controlling both the House of Representatives and the Senate.

Investors expect Trump's policies, which should include tariff and tax cuts, to boost inflation and interest rates.

Germany's 2-year yield, which is more sensitive to expectations for ECB policy rates, rose one basis point (bp) to 2.13%. It hit 2.091% on Friday, its lowest since Oct. 24.

Markets priced in an ECB deposit facility rate at 1.9% in July, while fully discounting a 25 bps rate cut in December and a 20% chance of a 50 bps move.

Germany's 10-year yield, the benchmark for the euro area, was down one bp at 2.34%.

Italy's 10-year government bond yields, the benchmark for the euro area periphery, dropped one bp at 3.54%. It hit 3.521% on Friday, its lowest since Oct. 30. (Reporting by Stefano Rebaudo, Editing by Bernadette Baum)