European government bonds are facing another brutal selloff. A stronger economy is partly to blame.

A measure of eurozone business activity rose at its fastest pace in more than three years, data showed Wednesday. In France, where growth has been flagging, activity rebounded to a two-year high.

-- French 10-year yields jumped 0.13 percentage point to 4.6%, a new post-financial crisis high. Greek and Italian yields rose by a similar amount.

-- German 10-year yields rose 0.8 point to 3.53%.

The rise in yields came as investors bet that the European Central Bank will keep raising interest rates. Derivatives markets are showing nearly a full percentage point of rate hikes from the ECB in the next year. That's up 0.15 percentage point from a day earlier, according to Tradeweb data.

Investors have questioned how much the European Central Bank can raise rates to combat war-driven inflation without causing a downturn. Wednesday's data should ease worries that the economy is too weak to withstand higher rates, while a jump in European diesel prices underscored the inflation risk facing the continent.