Euro zone bond yields higher after Fed hike

Headline consumer prices rose 3.2% from a year ago in August, revised data from the EU statistics office Eurostat showed on Thursday, above the ECB's 2% target.

Markets are pricing in a greater-than-40% chance of a rate hike from the ECB at its October meeting, while three quarter-point hikes are fully priced in by June of next year.

(Reporting by Samuel Indyk; editing by Barbara Lewis and Kevin Liffey)

Germany's 10-year bond yield DE10YT=RR, the benchmark for the euro zone, was up 1.5 basis points (bps) to 3.526%, just below its 17-year peak of 3.5723% hit on Tuesday.

The move in bonds was more evident at the policy-sensitive shorter end of the curve, where Germany's 2-year yield was up 3.5 bps to 3.247%. Bond yields move inversely with prices.