LONDON, Dec 15 (Reuters) - Euro zone government bond yields rose sharply in early trading on Thursday after the U.S. Federal Reserve raised interest rates in the world’s largest economy and signalled a faster pace of hikes in 2017.
The increase in the federal funds rate to a range of between 0.50 percent and 0.75 percent late on Wednesday was widely expected. But the prospect of a brisker monetary tightening contributed to a sell-off in U.S. Treasury yields and stocks.
Euro zone government bond yields followed suit when trading opened in Europe on Thursday morning, with benchmark German 10-year bond yields rising 6 basis points to 0.36 percent .
Other euro zone equivalents rose more, with Italy’s up 7 bps at 1.86 percent and Portugal’s up 11 bps at 3.90 percent.
Reporting by John Geddie; Editing by Atul Prakash