Euro zone yields climb after Fed drives sell-off

A rise in oil prices was also adding to the upward pressure on bond yields as traders factored in the possibility of stronger inflation. Brent crude was up 0.4% at $91.10 a barrel.

Germany's 10-year bond yield — the benchmark for the euro zone — climbed 1 bp to 3.16%. Yields move inversely to prices.

Energy prices climbed as the U.S. and Iran continued to trade attacks and the conflict spread in scope, with a drone hitting a U.S.-owned gas storage tanker at Egypt's Mediterranean port of Damietta according to British maritime security firm Ambrey.

Euro zone bond yields also ticked up slightly following better than expected growth data for the bloc, which showed the economy grew 0.4% in the second quarter.

Shorter-dated European bond yields slipped, however, causing yield curves to steepen. That reflected a fall in 2-year U.S. Treasury yields as traders reduced their bets on immediate Fed rate hikes.

The size and importance of the U.S. economy and its markets mean European yields broadly follow moves in Treasuries.