UPDATE 1-Euro zone bond yields edge up on weak PMIs ahead of Draghi's last ECB meeting

Yoruk Bahceli

ECB meeting@

* Euro zone flash PMIs mostly disappoint

* Bond yields marginally higher

* No major announcements expected at Draghi's last ECB meeting (Updates with French, German PMIs, new comment)

LONDON, Oct 24 (Reuters) - Euro zone bond yields edged up on Thursday after disappointing business activity data that put the region's economic performance in the spotlight ahead of the European Central Bank's last policy meeting under Mario Draghi.

The data, which came in mostly below Reuters poll forecasts, seta a bleak tone ahead of Draghi's last policy meeting in charge, where the focus will likely be on the unprecedented opposition to the stimulus measures he announced in September.

More than a third of policymakers including the central bank chiefs of France and Germany have opposed fresh bond purchases, threatening the effectiveness of ECB monetary policy.

"There's a sense from some of his (Draghi's) colleagues that he was overreacting and doing too much," said Jefferies economist Marchel Alexandrovich.

Draghi "will probably see what he announced in September as triggering an insurance policy... The data will help justify his decision if he needed a justification."

Euro zone business activity barely expanded in October as demand shrank, the flash PMI data showed.

The figures fuelled concerns that a contraction in manufacturing is seeping into services, as the services PMI fell to a 37-month low.

There was some optimism, however, as French business activity picked up more than expected.

Germany's 10-year government bond yield briefly rose more than three basis points to -0.36% on stronger-than-expected French data, but the safe-haven benchmark recovered once the German data was released, last up 1 bp at -0.39%.

Market attention has shifted away from Brexit, as EU member states on Wednesday delayed a decision on whether to grant Britain a three-month extension on its date for leaving the EU.

British Prime Minister Boris Johnson said if the deadline is deferred to the end of January he would call an election to be held by Christmas.

As for the ECB, it was "difficult to expect much given how much dissent there has been," said UBS strategist Lefteris Farmakis.

Focus will also be on whether the central bank provides any detail on the composition of its asset purchases, which restart in November. It may reiterate that the scheme is likely to be broadly in line with the previous round, in which government bonds made up most of the buying. "We don't think they're going to give away much at this one," said Rabobank fixed income strategist Lyn Graham-Taylor. Instead he said they were waiting for December's ECB economic predictions.

While money markets are pricing in practically no chance of a rate cut in December, Graham-Taylor said Rabobank analysts expect economic data to deteriorate enough to justify such a move. (Reporting by Yoruk Bahceli; Editing by Shri Navaratnam and Hugh Lawson)