Mubasher: Yields on the Eurozone bonds fell on Monday after weaker-than-expected business activities in Europe’s biggest economies sent a shudder of fear among investors over an potential recession, according to Reuters.

Across the Eurozone, the 10-year bond yields were down 6 to 8 basis points (bps) intraday.

Germany’s benchmark 10-year bond yield dropped to -0.59%, the lowest level recorded since the European Central Bank (ECB) announced rate cuts and re-launch of the asset purchase programme to boost economic growth.

In Spain, 10-year bond yields shed 8 bps to 0.154%, outperforming Eurozone counterparts, as S&P Global Ratings upgraded Spain to A from A-, pointing to economic resilience and improvement of budgetary position.

German private sector activity shrank for the first time since 6 years and a half in September, as a manufacturing slump worsened, while services business growth slowed down.

IHS Markit’s flash composite purchasing managers’ index (PMI), which measures the manufacturing and services sectors, dropped to 49.1, from 51.7 in August.

In France, business activity lost pace unexpectedly with the respective composite index falling to 50.4 in September from 51.9 last month, while the broader Eurozone composite flash PMI came in at 50.4, from 51.9.

This raft of gloomy figures stoked a rally in government bond markets, prompting a fall of yields, while the euro and share markets endured a drop.