Benchmark Bund yields bounced off three-week lows on Friday after data showed euro zone business growth unexpectedly accelerating, easing some of the fears about an economic slowdown in China. Bund yields fell as low as 0.56 percent at the open after the Caixin/Markit manufacturing index showed activity in Chinese manufacturing shrank at its fastest pace since 2009, but they closed flat at 0.58 percent. The firmer euro zone data also curbed earlier demand for safe-haven assets after Greek Prime Minister Alexis Tsipras resigned and called for early elections. Some risk aversion remained, keeping yields on lower-rated euro zone bonds in Spain, Italy and Portugal a few basis points higher on the day. "The snap election is having an impact on the market because it injects new uncertainty," said Elwin de Groot, senior market economist at Rabobank. "The latest euro zone data has been decent, so maybe that's why you see Bund yields 1 basis point higher, but at the end of the day people think the China story has legs." Spanish 10-year yields were 2.02 percent, Italy's were 1.86 percent and Portugal's were 2.63 percent. The early elections in Greece, pencilled in for September, put an end to a brief period of relief that Athens had avoided default and signed a third bailout to stay in the euro zone. "In the short term, it creates a lot of uncertainty. It will cause a delay in the reforms demanded by the memorandum of understanding," said DZ Bank strategist Christian Lenk, adding he sees Tsipras comfortably winning the ballot. "However the new government should be way more stable than the older one and this should dampen implementation risk in the longer term." Greek 10-year yields were 35 basis points higher at 9.85 percent, but still some way below their almost 20 percent five weeks ago. The plans for elections also lower the chances of the European Central Bank buying Greek bonds as part of its quantitative easing programme any time soon.