UPDATE 1-Euro zone yields rise on improved economic forecast hopes

* Yields rise 1-2 bps

* De Guindos says could raise macroeconomic projections

* Markets quiet ahead of Fed’s annual symposium (Adds details after ECB official comments, latest prices)

LONDON, Aug 25 (Reuters) – Euro zone government bond yields rose on Wednesday, hitting a day’s high after a European Central Bank official said the bank could revise up its macroeconomic projections for the euro zone again in September after recent solid activity indicators.

The comments by ECB Vice President Luis de Guindos lifted yields in an otherwise quiet day. Investors are largely holding off from any big bets ahead of the U.S. Federal Reserve’s annual symposium on Friday.

After last week’s drop, yields have recovered slightly as investor nerves have eased over a possible pullback in Federal Reserve stimulus and a slowing economic rebound.

By 1000 GMT, the benchmark 10-year German yield was 2 basis points higher at -0.463%, after rising to as much as -0.472%, while other core yields were up a similar amount, with the French 10-year yield hitting its highest since Aug. 13.

Earlier this month, the German 10-year yield touched -0.524%, its lowest since early February. While Fed officials have made noises about starting to taper asset purchases, the ECB had pledged to stick with its stimulus for now.

Peripheral bond yields rose too, although mostly by less than 1 basis point <IT10YT=RR<.

Wednesday is light on data. The German Ifo business climate index for August came in slightly below expectations, with morale falling for a second month running in August amid supply bottlenecks and rising COVID-19 cases, but the market was little moved.

ING analysts said bond yields looked due a move higher as concerns about the Delta COVID-19 variant wane.

“It’s not been easy in recent months to point to macro releases and use them to position for higher market rates. But at the same time, it feels like the momentum for falls in market rates has abated somewhat,” the ING analysts said.

“The narrative of Delta-impacted data is out there, but beyond that there is the realisation that within the next few months the vast majority of populations in developed markets (especially the U.S. and Europe) will either have been vaccinated or will have contracted Delta.”

U.S. Treasury yields rose marginally as investors waited for a speech on Friday during which Federal Reserve Chair Jerome Powell could give indications on when the U.S. central bank is likely to begin paring bond purchases.

Benchmark 10-year yields were up 1 basis point to 1.295% after briefly hitting 1.3%, the highest since Aug. 13.

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