* EC cuts Italian 2019 growth facts, raise deficit estimate
* Italian bond yields rise as much as 7 bps
* Moscovici says Italy must respect rules
* Italy coalition reaches deal over statute of limitations (Updates prices, adds Draghi comments)
LONDON, Nov 8 (Reuters) - Italian bond yields rose on Thursday after the European Commission cut Italy's growth estimate and forecast a jump in the budget deficit, and as infighting between Italy's coalition partners continued.
Italy's 10-year government bond yield rose six basis points higher to 3.39 percent, pushing its spread over higher-rated Germany out to 293 basis points.
Infighting between the Italian coalition government partners added to upward pressure on bond yields, although the government reached an agreement on justice reform on Thursday.
Ahead of that agreement, Deputy Prime Minister Luigi Di Maio was quoted as saying the coalition could collapse if there was no deal.
EU forecasts on Thursday showed Italian growth assumptions are optimistic. In 2019, Italian GDP would rise 1.2 percent, the Commission said, instead of the 1.5 percent seen by Italy.
Lower growth was expected to push up Italy's budget deficit, with the EU predicting a jump in the 2019 deficit to 2.9 percent, rather than the 2.4 percent seen by Italy, and to 3.1 percent in 2020, rather than fall to 2.1 as Rome assumes.
"Markets seem quite worried about the numbers the Commission put out, but already in the morning BTPs (Italian government bonds) were underperforming so the trend is continuing," said Jean-Christophe Machado, rates strategist at Natixis. "The positive note is that Spain and Portugal are doing quite well."
EU Commissioner for Economic Affairs Pierre Moscovici also heaped pressure on Italy's government to respect EU rules on deficits. The International Monetary Fund warned on Thursday Italy must cut its fiscal deficit and public debt as a priority as long as its economic growth is still above potential.
The euro zone economy will continue expanding but risks ranging from trade tensions to high asset prices are growing, European Central Bank President Mario Draghi meanwhile said.
He added that the bank's policy guidance is not carved in stone and can be changed if the outlook darkened.
Euro zone bond yields were broadly higher on a day of heavy bond supply for the bloc.
Ireland sold 750 million euros ($855 million) of five and 10-year bonds, while Spain raised four billion euros with a sale of multiple bonds, and France raised 8.87 billion, also via a sale of multiple bonds.
In late trade, 10-year year bond yields in the bloc were 1-2 bps higher on the day.
Germany's 10-year bond yield was up a basis point at 0.46 percent, just off a two-week high hit earlier in the session.
Risk appetite, which picked up in the wake of Tuesday's U.S. midterm elections, eased off ahead of a statement from the Federal Reserve after its policy meeting.
The Fed Reserve began its policy meeting on Wednesday facing a shifting political landscape but little in recent economic data to alter plans for an interest rate increase in December and more to come next year. ($1 = 0.8769 euros) (Reporting by Virginia Furness; Additional reporting by Dhara Ranasinghe; Editing by Toby Chopra)