May 30 (Reuters) - Euro zone benchmark Bund yields edged lower on Thursday after reaching a fresh six-month high early in the session, with investors taking a breather ahead of key economic data from the opposite sides of the Atlantic.

On Wednesday, Germany's 10-year yield hit its highest in over six months and Italian BTPs reached 4% after German inflation rose slightly more than forecast and a Federal Reserve official said he didn’t rule out a rate hike.

Markets are awaiting U.S. figures on gross domestic product due later on Thursday, followed by inflation data from Italy, France and the euro zone as well as the latest U.S. consumer price expenditure (PCE) index - the preferred Federal Reserve inflation gauge - on Friday.

Data on Thursday showed that Spain's inflation rate rose to 3.8% in the 12 months through May, above the 3.7% average expectation of analysts polled by Reuters.

Germany's 10-year yield, the euro zone's benchmark, was down one basis point (bp) at 2.67% after touching its highest level since mid-November at 2.687%.

Investors were focusing as well on the European Central Bank (ECB) policy meeting next week, which is widely expected to cut rates by 25 basis points.

Money markets have priced in 58 basis points of ECB monetary easing in 2024, implying two rate cuts and an around 30% chance of a third move by year-end.

"The ECB will not commit to a specific sequence of rate cuts and will remain fully data-dependent," said Christoph Rieger, head of rates and credit research at Commerzbank.

"The rate cut will also not be described as monetary easing or normalisation, but rather as a reduction in the degree of restriction," he added.

Germany's two-year government bond yield, which is more sensitive to policy rate expectations, was flat at 3.10%.

U.S. economic activity continued to expand from early April through mid-May. Still, firms grew more downbeat about the future amid weakening consumer demand while inflation continued to rise at a modest pace, a U.S. Fed survey showed.

"The Fed's Beige Book did not get much attention but supported the rise in interest rates, as it showed that the U.S. economy continued to expand even though companies became a bit more pessimistic about the future," said Karl Steiner, head of economic research at SEB, mentioning the market focus on U.S. data due later in the session.

"A downward revision (of GDP) would possibly provide some respite in the rise in interest rates," he added.

Italy's 10-year yield dropped 1.5 bps to 3.99%.

The yield gap between Italian and German bonds , a gauge of the risk premium investors seek to hold bonds of the euro area's most indebted countries, tightened slightly to 130 bps. (Reporting by Stefano Rebaudo; editing by Mark Heinrich)