By John Geddie
LONDON, Oct 19 (Reuters) - Euro zone yields rose on Monday after Chinese growth data beat expectations and a top ECB policymaker struck a note of caution about an extension to Europe's quantitative easing scheme.
Chinese economic output in the July-September quarter was up 6.9 percent from the same quarter last year, just above forecasts for a 6.8 percent rise. But it was the first time growth has dipped below 7 percent since the financial crisis.
Weakening demand from China is exacerbating a decline in commodity prices and global consumer price growth. In Europe, this has led to another bout of deflation.
But ahead of the ECB's policy meeting on Wednesday, governing council member Ewald Nowotny told a Polish newspaper that it was too early to talk of an extension of its trillion euro quantitative easing scheme. This appeared to be in contrast to comments last week in which he said the bond-buying might be broadened.
"The (ECB's) current programme is still in its infancy and its full effect on the euro zone economy is still to be felt," said Mizuho strategist Peter Chatwell.
"The governing council will thus prefer to wait for at least until the mid-point of the current programme before committing to an extension," he added, predicting such a move to be announced in December.
German bond yields - the euro zone benchmark - rose 3 basis points to 0.57 percent.
Most other euro zone yields were 1-3 basis points higher, including Spain's after the country missed out on an expected ratings upgrade.
Moody's decided to skip a review of the country's credit rating on Friday, confounding expectations that the agency would raise its rating to bring it in line with those of Standard & Poor's and Fitch.
Greece was the only country to see yields fall on Monday after its parliament approved an omnibus reform bill ahead of the first review of the country's new bailout programme later this month.
Inspectors from the European Commission, European Central Bank, euro zone rescue fund and International Monetary Fund are expected in Athens at the end of October to assess progress on Greece's third financial rescue package.
Athens wants to conclude the review and recapitalise its banks quickly, to secure fresh aid and talks on debt relief. But it must first enact a long list of reforms as detailed in the 86-billion-euro ($97.6 billion) bailout plan.
Greek 10-year yields fell 9 basis points to 7.80 percent .
(Editing by Hugh Lawson)