Euro zone bond yields were on track for their biggest weekly rise in a month on Friday, although they were little changed on the day, after strong economic data caused traders to further scale back their bets on central bank interest rate cuts.

Germany's 10-year bond yield, the benchmark for the euro zone bloc, was down 2 basis points (bp) at 2.583% after hitting a one-month high of 2.611% the day before.

The yield, which moves inversely to the price, was heading for a 7 bp rise across the week.

A survey-based gauge of the economy on Thursday showed euro zone business activity expanded at its fastest pace in a year this month, supported by buoyant demand for services, while the manufacturing sector showed signs of recovery.

Separate data showed euro zone

wage growth

remained strong and

U.S. survey numbers

pointed to continued strength in the American economy.

The readings convinced traders that the world's central banks are less likely to lower interest rates this year. They now price in less than 60 bps of European Central Bank rate cuts in 2024, down from closer to 70 bps at the start of the week.

"Yesterday's data was another reminder that the timing for a full-blown global easing cycle is still a long shot," said Michiel Tukker, senior European rates strategist at ING.

"The pricing for European Central Bank cuts in 2024 is down to 60bp (and) could go even lower in our view. For the U.S., the case for higher yields based on the latest figures is even stronger."

Germany's two-year bond yield, which is sensitive to ECB rate expectations, was little changed at 3.08% on Friday, after hitting its highest level since November the previous day at 3.105%.

Next week investors will be looking closely at both U.S. personal consumption index inflation - the Federal Reserve's preferred measure - and headline euro zone consumer price index figures.

Italy's 10-year yield was down 1 bp at 3.883% on Friday and was set for a weekly rise of 7 bps. The gap between Italian and German bond yields held broadly steady at 129 bps.

The spread between U.S. 10-year Treasuries and German bond yields was flat at 189 bps.

(Reporting by Harry Robertson; editing by Philippa Fletcher and Ed Osmond)