Euro zone bond yields tick up after ECB rate hike and Trump's Iran comments

By Harry Robertson and Stefano Rebaudo

June 11 (Reuters) - Euro zone bond yields rose slightly on Thursday, but remained lower on the day, after European Central Bank policymakers raised interest rates and signalled the outlook for growth and inflation was uncertain.

Germany's 2-year yields, which is sensitive to expectations for policy rates, were last very slightly lower on the day at 2.701%, from 2.673% before the decision.

However, a statement from U.S. President Donald Trump that the U.S. will be hitting Iran "very hard" on Thursday night also pushed yields higher just after the ECB decision.

Yields were lower before the meeting, with oil prices falling slightly as traders monitored the latest headlines on U.S.-Iran peace talks.

The ECB raised interest rates to 2.25%, from 2%, saying: "The war in the Middle East is generating inflation pressures, and the decision to raise rates is robust across a range of scenarios mapping out how the shock might evolve."

It added: "The outlook remains uncertain, with upside risks for inflation and downside risks for economic growth."

The ECB is keen to stamp out any danger that inflation will pick up pace after it struggled to contain rising costs in the wake of Russia's invasion of Ukraine in 2022.

Euro zone inflation rose to 3.2% in May, its highest since September 2023, as energy costs surged.

Traders were last pricing in around 45 bps of further hikes this year, little changed from before the decision. They will now look to ECB President Christine Lagarde's press conference for further clues about the outlook.

Germany's 10-year government bond yield, the euro area's benchmark, was last down 1 bp at 3.056%, from around 3.04% before the decision. Yields move inversely to prices.

It reached 3.20% in mid-May, its highest level since May 2011, before signs of an economic slowdown driven by the Iran war helped pull yields lower. (Reporting by Harry Robertson and Stefano Rebaudo; editing by Alex Richardson and Toby Chopra)