Euro zone government bond yields edge up before ECB policy meeting

Dec 12 (Reuters) - Euro zone government bond yields edged up on Thursday ahead of a European Central Bank policy meeting that is expected to deliver a 25 basis point rate cut and some dovish guidance.

Germany's 10-year bond yield, the benchmark for the euro zone bloc, rose 1.5 basis points (bps) to 2.15%.

Money markets fully priced in a 25 bps ECB rate cut later in the session, no chance of a 50 bp move, and a deposit facility rate at 1.85% in July 2025.

U.S. data on Wednesday showed core inflation rose 0.3% for a fourth consecutive month in November, indicating that progress towards the Federal Reserve's goal has stalled, analysts said.

Germany's two-year yield, more sensitive to ECB rate expectations, was up 0.5 bps at 1.97%.

Italy's 10-year yield rose 3 bps to 3.23%, after hitting a fresh 28-month low of 3.162% the day before.

The spread between Italian and German borrowing costs - a gauge of the risk premium investors demand to hold Italian debt - widened to 107 bps. It hit 104.50 bps earlier this week, its lowest since Oct. 2021.

The yield gap between French government bonds and safe-haven German Bunds stalled at 76.60 bps. President Emmanuel Macron set himself 48 hours to name a new government on Tuesday.

(Reporting by Stefano Rebaudo, editing by Kirsten Donovan)