(Updates rates) LONDON, Aug 10 (Reuters) - Government bond yields in Germany, the euro zone’s benchmark bond issuer, held above recent six-month lows on Tuesday as talk that the U.S. Federal Reserve could soon discuss tapering its bond-buying stimulus kept bond market bulls in check for now. In choppy trade, the 10-year Bund yield briefly rose to its highest level in just over a week, before slipping lower. Investor sentiment in Germany deteriorated for a third month in a row in August on fears of rising COVID-19 infections, according to a ZEW economic research institute survey, lending some support to euro area debt markets. But significantly, borrowing costs across the single-currency bloc held above the multi-week lows hit last week as Friday’s stronger-than-expected U.S. jobs report and other signs of an improving labour market prompt investors to rethink the outlook for U.S. monetary policy. “Treasuries remain the driving force and markets have a hard time holding their ground with last week’s swings still in mind,” said Michael Leister, head of interest rates strategy at Commerzbank. “Lingering U.S. taper risks continue to loom large as (rate)hike expectations have been picking up again since last week, with the first hike still priced in for Q1 2023.” Germany’s benchmark 10-year Bund yield was a touch lower at -0.46%. It briefly hit its highest in just over a week at -0.447% as 10-year U.S. Treasury yields rose to their highest in more than three weeks. On Monday, two Fed officials said the U.S. economy was growing rapidly and that while the labour market still had room for improvement, inflation was already at a level that could satisfy one leg of a key test for the beginning of rate hikes. U.S. July inflation numbers, scheduled to be released on Wednesday, are expected to provide the next stimulus for markets. Data released on Monday meanwhile showed the European Central Bank bought a net 21.59 billion euros ($18.35 billion) of assets last week as part of its quantitative easing programme, above the roughly 9 billion euros it bought a week earlier. Analysts said a seasonal slowdown of ECB bond purchases had not been as pronounced as expected, a sign of the ECB’s commitment to maintain an elevated pace of buying in the third quarter. Reporting by Dhara Ranasinghe Editing by Vinay Dwivedi and Mark Potter Our Standards: The Thomson Reuters Trust Principles.