LONDON, June 18 (Reuters) - Euro zone bond yields edged

higher on Thursday as traders weighed a hawkish shift from the

Federal Reserve in a busy week for global central banks, while

the U.S. and Iran said they signed a deal that would reopen the

Strait of Hormuz.

Yet some tensions appeared to remain, even as the U.S. and

Iran released an interim agreement to end the war, with

President Donald Trump threatening to resume attacks and kill

Iranian officials if they failed to honour their commitments.

Brent crude futures were recently down around 1.8%

at $78.12 a barrel, trading around early-March levels.

The yield on the German 10-year bond, the

benchmark for the euro zone, was a touch higher at 2.9261%,

after pulling back for five consecutive days.

German 2-year bond yields were up by 2.9 basis

points to 2.6128%.

CENTRAL BANKS IN FOCUS

The Federal Reserve held interest rates steady, as expected,

on Wednesday. But new quarterly projections showed that nine

policymakers now see a hike in rates by the end of 2026. And an

updated policy statement removed language that had been used to

flag the likelihood of further reductions in borrowing costs

this year.

Short-term U.S. Treasury yields rose sharply on Wednesday as

expectations for tighter Fed policy grew.

This week's meeting was the first under new Chairman Kevin

Warsh, who was appointed by Trump earlier this year with an

expectation that he would deliver the rate cuts.

Attention on Thursday was also on central banks elsewhere,

with the Swiss National Bank leaving rates unchanged. The Bank

of England is due to announce its policy decision later in the

day. It is widely expected to keep rates steady.

Their decisions come after the European Central Bank last

week raised rates, with the Bank of Japan following suit earlier

this week. Markets have been paying close attention to comments

from policymakers as they have tried to assess what impact the

U.S.-Israeli war on Iran might have on the economy, with worries

about rising inflation, higher rates and weaker economic growth

taking hold.

Money markets were last pricing in at least one more rate

hike from the ECB this year.