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By Stefano Rebaudo
Aug 28 (Reuters) - Euro zone government bond yields edged higher on Monday as investors awaited data from the bloc and the U.S. later this week after central bankers in Jackson Hole did not provide additional cues about the direction of the monetary policy.
Federal Reserve Chair Jerome Powell did little on Friday to dissuade markets from the "higher for longer" mantra for rates that has driven up Treasury yields in recent weeks, leaving some investors looking for more cautious bets in the event the economy cannot escape a downturn next year.
Powell's remark "that the Fed is prepared to raise rates if appropriate and reasonable was probably the most interesting statement," according to Berenberg analysts. "What is appropriate and reasonable will become clear in the coming weeks."
European Central Bank President (ECB) Christine Lagarde said that profound changes in the global economy could create greater inflation volatility and more persistent price pressures.
"Jackson ultimately didn't deliver any fireworks. Looking forward, we expect volatility to stay low," Citi analysts said in a note to clients.
Germany's 10-year government bond yield, the benchmark for the euro area, was up one basis point at 2.57%.
It was between 2.55% and 2.57% on Friday in the four hours before Powell's speech.
"There were a few hawkish elements in Powell's speech," which "also included some dovish tones," said Aditya Bhave, U.S. economist at BofA.
"We remain comfortable with our call for one more 25 bps hike (from the Fed) in November and 75 bps of cuts next year, starting in June and proceeding at a quarterly cadence."
Investor focus is now on the inflation data from Germany and Spain on Wednesday and from France and Italy on Thursday, along with the euro area's aggregate numbers.
In the U.S., initial jobless claims will be released on Thursday, while monthly data are due on Friday.
Remarks from ECB policymakers remain in focus, with Vice President Luis de Guindos and Isabel Schnabel -- a prominent policy hawk and the head of the ECB's market operation -- due to speak later this week, along with more Fed officials.
Money markets keep pricing an around 40% chance of a 25 bps rate hike in September, with ECB euro short-term rate (ESTR) forward, which barely moved after falling last week as HCOB's flash Composite Purchasing Managers' Index (PMI) for the bloc was weaker than expected.
Italy's 10-year bond yield, the benchmark for the euro area's periphery, rose 0.5 bps to 4.24%. (Reporting by Stefano Rebaudo; Editing by Mike Harrison)