Eurozone bond yields held steady on Wednesday as the market awaited U.S. consumer price index data later in the day and looked to a European Central Bank meeting on Thursday.

Germany's 10-year bond yield, the benchmark for the euro zone bloc, was down 1 basis point (bp) at 2.106%. Bond yields move inversely with prices.

Traders are waiting on U.S. CPI inflation data at 1330 GMT, which could influence investors' expectations about future Federal Reserve rate cuts.

"After mixed (U.S.) jobs data last week, focus is back on inflation this week," said Saxo Markets analysts in a research note.

A higher-than-expected inflation reading might not stop the Fed from cutting rates next week but could influence the number of rate cuts the market expects next year, they added.

The size and importance of the U.S. economy means changing expectations about the Fed tend to move bond markets around the world.

Italy's 10-year yield was 1 bp lower at 3.189%, keeping the gap between Italian and German bonds steady at 108 bps.

On Thursday, investors expect the ECB to cut rates, with markets fully pricing in a 25-bps reduction.

Germany's 10-year bund yield spiked to a four-month high in November as investors worried about long-term inflation pressures in the euro area and the upcoming U.S. election.

But yields have since fallen back as euro zone economic data has painted a weaker picture than expected, and trade 9 bps lower than when the ECB last cut rates in October.

Germany's two-year bond yield, which is sensitive to European Central Bank rate expectations, was down 1 bp at 1.958% on Wednesday.

France's 10-year yield was flat on the day at 2.871% , showing little reaction after President Emmanuel Macron on Tuesday set himself 48 hours to name a new government.

France's 10-year bond yield briefly rose above Greece's last week, as budget turmoil, which led to the collapse of the government, gripped the country.

(Reporting by Greta Rosen Fondahn; Editing by Andrew Heavens and Christina Fincher)