ECB Tightening Bets Send German Bond Yields Soaring

German government bond yields are on track for their fourth consecutive weekly rise as investors bet that central banks will keep monetary policy restrictive to contain persistent inflation pressures in a resilient economy.

The yield on Germany's 10-year government bond rose 0.5 basis points to 3.36% and is set for a weekly increase of 7.5 basis points, its biggest since mid-July.

Markets are reassessing the outlook for inflation and interest rates across the euro zone following a survey that showed growth in the bloc's manufacturing sector accelerated to its fastest pace in more than four years in August, while inflation moved back above 3% due to higher energy costs.