The rate on benchmark German 10-year bonds fell to an all-time low on Friday as concern about the eurozone's economic prospects pushed investors into the continent's financial safe-haven.
The yield, or rate of return for investors on German Bunds fell to 1.582 per cent, from 1.611 per cent late yesterday.
"We had a series of bad statistics on both sides of the Atlantic. Europe is sinking into recession and the US recovery seems to be weaker than expected in light of the latest employment report," said Rene Defossez, a bond strategist at Natixis bank.
"All that encourages investors to take refuge in German debt," he added.
In the 17-nation eurozone, private sector activity fell sharply in April, with even powerhouse Germany grinding to a halt as the bloc's weaker southern members struggled, a key survey showed today.
The Purchasing Managers Index (PMI) compiled by London-based research firm Markit fell to 46.7 points in April, well below an initial 47.4 estimate. That raised fears that the bloc might suffer from a longer recession than initially foreseen.
In the United States meanwhile, a Labor Department report said that the rate of unemployment dropped from 8.2 per cent from 8.1 per cent, but that the economy created only a net 115,000 jobs last month, below market expectations.
Capital Economics analyst Paul Ashworth said the second figure would fuel concern "that the (US) recovery is fading fast, just like it did at this time last year."
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