Bund yields edge up from multi-week lows, US data in focus

Feb 12 (Reuters) - Euro zone benchmark Bund yields edged up from multi-week lows on Thursday as investors awaited further U.S. data for guidance, though any spillover ?into the euro area is expected to ?be limited.

While markets priced in more Federal Reserve rate cuts, the European ?Central Bank has been firmly on hold since last ?summer, reducing volatility in the euro area's ?fixed-income market.

Germany's 10-year ?government bond yield, the euro area's benchmark, was up 0.5 basis points (bps) ?at 2.80% after hitting 2.793% ?a day earlier, its lowest level since January 14.

U.S. Treasury yields edged up, with the benchmark ?10-year at 4.17% in early ?London ?trading, after climbing the day before as economic data dented expectations that the Fed could have sufficient leeway for ?a rate cut in the near term.

Harsh ?weather in the U.S. affected the survey of households, resulting in a below-average response rate of 64.3%, causing some economists to caution against reading too much into the decline ?in ?the unemployment rate from 4.4% in December.

Inflation ?data is due on Friday and will be ?the next indicator for the market on interest rate cuts.

Money markets priced in a 23% chance of an ECB rate cut by December.

Germany's 2-year yield, which is more sensitive to expectations for policy rates, was flat at 2.05%.

Italy's 10-year government bond ?yields rose one bp to 3.42%. The gap versus Bunds was at 60 bps after falling to 53.50 in mid-January, ?its lowest level since ?August 2008. (Reporting by Stefano Rebaudo; Editing ?by Thomas Derpinghaus)