November 14, 2017 / 9:17 AM / a year ago

German yields up on strong growth, "Big 4" to join central bank panel

* German growth beats expectations, rising 0.8 percent

* Yield on German 10-year highest since day after Oct ECB meet

* Most other major economies also see bond yields rise

* Euro zone periphery govt bond yields

By Abhinav Ramnarayan

LONDON, Nov 14 (Reuters) - Euro zone bond yields rose across the board on Tuesday after strong growth in Germany pushed the euro higher and reduced the case for tighter monetary policy ahead of a gathering of the world’s top policymakers.

The yield on Germany’s 10-year government bond, the euro zone’s benchmark debt instrument, rose to 0.43 percent after data showed German economic growth accelerated in the third quarter on buoyant exports and investment. The euro rose to its highest since October’s European Central Bank meeting.

Growth in Europe’s largest economy bodes well for euro zone economic data due at 1000 GMT, and could add fresh impetus to the rise in bond yields as investors start to price in a gradual withdrawal of stimulus, not just in Europe but across the world.

The 10-year debt yields of all the major developed economies — the United States, Germany, Japan and Britain — have risen recently.

“One reason (for the rise in yields) is the improvement in GDP growth data in all countries, even the UK, although this is just one variable when it comes to monetary policy,” said Nadia Gharbi economist at Pictet Wealth Management.

“But it is important to remember the target (for central banks) is inflation. It’s true that GDP growth is important but the mandate is inflation.”

ECB Vice-President Vitor Constancio said on Monday that monetary policy must remain easy as inflation in the euro zone continues to lag the central bank’s 2 percent target despite stronger economic growth and falling unemployment.

The euro zone growth numbers will be released just before the world’s top monetary policymakers form an all-star panel at an ECB-hosted conference in Frankfurt. ECB President Mario Draghi, U.S. Federal Reserve Chair Janet Yellen, Bank of England chief Mark Carney and Bank of Japan head Haruhiko Kuroda will discuss how central banks communicate.

Key bond auctions due later on Tuesday could also have an impact on the market, analysts said. The Netherlands is due to sell 2-3 billion euros of 10-year bonds and Germany will launch a new two-year “Schatz” bond, with an initial volume of 5 billion euros.

Yields typically rise ahead of big bond sales as investors make space for the new supply.

The yield on the outstanding German two-year benchmark bond was unchanged at minus 0.74 percent ahead of the auction.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=

Reporting by Abhinav Ramnarayan; Editing by Catherine Evans

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