Euro zone business activity crumbled, with IHS Markit's euro zone composite flash purchasing managers index (PMI) plummeting to a record low of 31.4 from February's 51.6, far below the 50 level that signals growth and far lower than Reuters poll expectations
Euro zone bond markets, which have been trying to gauge the impact of the economic hit from the outbreak and a significant rise in expected issuance as governments step up to counter the slowdown with fiscal stimulus, showed little reaction to the data.
Germany's 10-year yield was up 2 basis points on the day at -0.36pc, compared with a rise of 4 bps before the PMI release , small moves when compared to record lows hit at -0.90pc earlier in March.
"I think we have reached a maybe some kind of equilibrium trading range in safe-havens, so... given the prospect for the economic downturn and much more issuance going forward, I think the level where yields are settling down is the place for them to be," said DZ Bank strategist Rene Albrecht.
Bond yields were up overall on the day alongside stocks , extending a reversal of the pattern of last week, when safe-haven bonds and shares took a beating as investors sold liquid assets to make up for losses elsewhere.
In issuance, Germany will sell 4 billion euros of two-year bonds, while Spain is expected to sell a seven-year bond via a syndicate of banks.
Later on Tuesday euro zone finance ministers will discuss European Commission proposals to make use of the bloc's bailout fund to fight the economic impact of the coronavirus outbreak.
Italy is in favour of allowing the bailout fund to provide financial support without conditionality, and also supports the issuance of European Union bonds. Germany once again dismissed calls for joint debt issuance on Monday.
The German government, which will finance a new supplementary budget of 156 billion euros with new borrowing to tackle the impact of the outbreak, will return to its savings policy once the crisis is over, its economy minister told a local broadcaster.