LONDON: German bond yields fell on Monday after data showing Japan unexpectedly slipped into recession in the third quarter, stoking investor concerns about global growth.
The world's third-largest economy contracted at an annualised rate of 1.6 percent in the period, way below the 2.1 percent expansion forecast by economists in a Reuters poll.
The data, coupled with deteriorating relations between the West and Russia over the Ukraine conflict prompted investors to sell equities and park money in safe-haven bonds such as U.S. and German government paper.
"The weak data set against the backdrop of geopolitical trouble has prompted the slide in Bund yields," said Societe Generale strategist Ciaran O'Hagan.
German 10-year yields fell 2 bps to 0.78 pct, just above a record low of 0.716 pct, while U.S. equivalents were also 2 bps lower at 2.30 pct.
Lower-rated euro zone bond yields such as those in Greece, Portugal, Spain and Italy were flat or a tad higher on the day.
Russian President Vladimir Putin left the weekend's G20 summit in Australia early as U.S. President Barack Obama accused Russia of invading Ukraine and Britain warned of a possible "frozen conflict" in Europe.
With little euro zone data due out on Monday, markets focused on speeches from ECB policymakers which could throw up hints of more policy easing
ECB Executive Board member Yves Mersch said on Monday the ECB could theoretically extend its asset purchase programme to buy state bonds, gold, shares or exchange traded funds in order to expand its balance sheet.
Board members Peter Praet and Benoit Coeure are also due to speak, while ECB president Mario Draghi will give his quarterly testimony before the European Parliament.
The euro zone economy beat market expectations to expand 0.2 percent in the third quarter, data on Friday showed, while preliminary factory activity data for November this week will help markets gauge conditions in the fourth quarter.
Belgium will sell five- and 10-year bonds in its last auction of the year. Belgian 10-year yields were 1 bp lower at 1.06 percent despite Fitch revising the outlook on its AA rating to negative from stable on Friday.
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