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LONDON, April 10 (Reuters) - The euro jumped on Tuesday, bond yields edged higher and European stocks gave up some gains after a top European Central Bank policymaker said the bank could raise its sub-zero desposit rate before normalising monetary policy.
Ewald Nowotny told Reuters in an interview that its 2.55 trillion euro ($3.1 trillion) bond buying programme would be wound down by the end of this year, which would then pave the way for the bank's first rate rise since a fumbled move in 2011.
"The market is moving on Nowotny's comments that suggest there could be a 20 basis point move on the deposit rate rather than a 10 basis point step up," ING strategist Martin Van Vliet said.
"But though I don't want to downplay the importance of his statements, if Draghi or Praet were to say this the move would be even bigger."
Euro zone borrowing costs rose by 1-3 basis points across the board. The yield on Germany's 10-year Bund, the benchmark for the bloc, rose to a 5-day high of 0.525 percent
Euro zone stocks slightly reduced gains but remained within their daily trading range, last up 0.5 percent.
The euro briefly jumped to the day's highs of $1.2378 and was up 0.4 percent on the day. (Reporting by the London Markets Team; Editing by Tommy Wilkes)