Nov 29 (Reuters) – Euro zone long-dated government bond yields were on track for a fourth straight weekly fall on Friday as data suggested a bleak economic outlook while a market gauge of inflation expectations dropped below 2%.

The risk premium for holding French debt steadied as the government said it was ready to make concessions over the next budget amid growing concerns that opposition to the bill could topple Prime Minister Michel Barnier’s administration, which is trying to curb an increasing public deficit.

Markets are waiting for inflation figures from France, Italy and the wider euro zone area later in the session.

Germany’s 10-year bond yield, the benchmark for the bloc, was flat at 2.3% and down 12.5 basis points (bps) for the week.

Data on Thursday showed that German annual inflation remained flat in November against expectations of a second consecutive increase.

Markets have priced in a European Central Bank deposit facility rate of around 1.85% in July. They are fully discounting a 25 bps rate cut at the ECB’s December meeting and have reduced the chance of a 50 bp move to around 20% from over 50% soon after PMI data was released last week.

Germany’s 2-year government bond yield – more sensitive to ECB policy rate expectations – fell 1 bp and was on track to end the week almost flat.

The gap between French and German yields – a gauge of the premium investors demand to hold France’s debt – was unchanged at 80.5 bps, after hitting 90 bps earlier this week, its widest level since 2012.

Italy’s 10-year government bond yield – the benchmark for the euro zone periphery – fell 1 bp to 3.34% and was down 16.5 bps on the week.

(Reporting by Stefano Rebaudo, editing by)