* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Updates prices, adds details)
By Olga Cotaga
LONDON, Jan 20 (Reuters) - European government bond yields edged lower on Monday ahead of key economic events this week including multiple central bank meetings where the European Central Bank is expected to launch a strategic review including a rethink of an inflation goal.
The International Monetary Fund is expected to release its world economic outlook update on Monday. On Friday, flash readings of the Purchasing Managers’ Index - showing economic trends in the manufacturing and service sectors - are due across major economies.
Ratings agency Fitch affirmed Germany’s rating at AAA late on Friday and China’s Vice Premier Liu said he will negotiate with U.S. companies to increase imports of U.S. goods, which dampened appetite for safe-haven government debt, keeping yields stable.
“The lack of immediate risk to sentiment should keep rates volatility low,” said Antoine Bouvet, senior rates strategist at ING.
“Rates markets are going into Thursday’s ECB meeting with moderate expectations ... the main event will likely be the launch of the ECB’s strategic review,” he said.
Volumes were expected to stay thin on Monday, with American and Chinese traders on holiday, analysts said.
The benchmark German 10-year Bund yield was last at -0.256%, down six basis points on the day, with most of the euro zone market trading with a softer bias.
Italian 10-year yields were down 2 bps at 1.36%, extending Friday’s falls.
Last week, Italian government bonds rallied and outperformed their euro zone peers after Italy’s highest court rejected a proposed change in electoral law that would probably have benefited the far-right League.
U.S. Treasury yields also rose on Friday after strong homebuilding and manufacturing reports and upbeat corporate earnings, while traders eyed the potential impact of a new government bond coming by summer.
Germany and the Netherlands have room to spend more to boost economic growth, International Monetary Fund chief economist Gita Gopinath said on Monday, joining a long list of experts calling the two countries to open state coffers. (Reporting by Olga Cotaga; Editing by Andrew Cawthorne and Andrew Heavens)