Euro zone yields rise, walking back Fed-driven fall

LONDON, Aug 25 (Reuters) - Euro zone bond yields rose on Monday, reversing their fall from late last week as traders reassessed that U.S. Federal Reserve-driven move and its impact on Europe.

Germany's 10-year bond yield, the benchmark for the euro zone, was up nearly 4 basis points at 2.76%, DE10YT=RR having dropped a similar amount on Friday.

In his final address as Fed chair at the Jackson Hole economic symposium, Fed chair Jerome Powell hinted at a September interest rate cut. While he stopped short of committing, that was sufficient to spark a rally in stocks and U.S. Treasuries that spilled over into Europe.

That then reversed somewhat on Monday, partly because the European Central Bank, which has cut rates by much more than the Fed so far this cycle, is now in a different place.

Remarks by ECB policymakers at Jackson Hole were "consistent with an extended pause," Jim Reid, global head of macro research at Deutsche Bank, said in a note.

ECB President Christine Lagarde avoided discussing the policy outlook but highlighted the resilience of the euro area labour market.

Italy's 10-year yield moved largely in line with Germany's, up just over 4 bps to 3.60%. IT10YT=RR

Germany's two-year yield was up 2 bps at 1.97% DE2YT=RR