September 28, 2017 / 6:15 AM / a year ago

Euro zone bond yields up sharply on U.S. tax plan, data

LONDON, Sept 28 (Reuters) - Euro zone government bond yields rose sharply on Thursday after U.S. President Donald Trump proposed the biggest U.S. tax overhaul in three decades and as strong U.S. economic data added to the case for another interest-rate hike this year.

Germany’s benchmark 10-year bond yield rose 4 basis points to 0.504 percent, its highest level in over eight weeks.

Most other bond yields in the single-currency bloc were up 2 to 5 bps in early trade.

Trump on Wednesday proposed to lower corporate and small-business income tax rates, reduce the top income tax rate for high-earning American individuals and scrap some popular tax breaks.

U.S. Treasury yields, pushed up on Wednesday by stronger-than-expected durable goods data, extended their rises into European trade on Thursday.

U.S. 10-year Treasury yields were more than 4 bps higher on the day at 2.35 percent, pushing the gap with German peers to around 185 bps — the widest since early July. (Reporting by Dhara Ranasinghe, editing by Larry King)

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