Euro zone long-dated yields resume their grind higher

LONDON, Aug 25 (Reuters) - Euro zone bond yields resumed their climb on Monday, reversing a U.S. Federal Reserve-driven fall from late last week as traders reassessed that move and any Fed impact on Europe, and processed data showing an uptick in German business morale.

Germany's 10-year bond yield, the benchmark for the euro zone, was up 5 basis points at 2.77%, DE10YT=RR heading back towards last week's near five-month top of 2.787%.

Germany's 30-year yield rose nearly 6 bps to 3.36% and was just a whisker off last week's 14-year high. DE30YT=RR

"The mild upward trajectory since June in long-end European government bond yields remains intact," said Kenneth Broux head of corporate research FX and rates at Societe Generale.

Longer-dated yields have been rising around the world as investors grow nervous over governments' high levels of debt, or in Germany's case, a large expansion in its borrowing.

That trend saw a fairly rare interruption last Friday, as Fed chair Jerome Powell, in his final address as Fed chair at the Jackson Hole economic symposium, hinted at a September interest rate cut.

While he stopped short of clearly committing to such a move, his comments were sufficient to spark a rally in stocks and U.S. Treasuries that also spilled over into Europe, sending German 10-year yields down around 4 bps.

However, yields' rising trend resumed 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.

U.S. Treasury yields also rose around 2 basis points across the curve as traders calibrated their positioning. US10YT=RR

Back in Europe, data on Monday that showed German business morale unexpectedly improved in August to its best level in 15 months further underpinned the rise in yields and offered a similar message to last week's upbeat business activity data.

That helps reduce the pressure on the ECB to cut rates again this cycle. Markets see a further cut this year as unlikely, though they do see a reasonable chance of a move by the early part of next year. 0#EURIRPR

Italy's 10-year yield moved largely in line with Germany's, up nearly 6 bps to 3.61%. IT10YT=RR

Germany's two-year yield was up 3 bps at 1.98%, slightly steepening the country's yield curve. DE2YT=RR