German 10-Year Bunds Gain as Data Show Euro-Area Economy Shrinks

German 10-year bonds advanced after a report showed the euro region’s recession deepened more than economists forecast in the fourth quarter of 2012.

The yield on German 10-year bonds fell two basis points, or 0.02 percentage point, to 1.66 percent as of 10:04 a.m. London time. The two-year rate also dropped two basis points, to 0.20 percent.

Gross domestic product in the 17-nation region fell 0.6 percent in the fourth quarter from the previous three months, the European Union’s statistics office in Luxembourg said today. The median forecast of 45 economists in a Bloomberg survey predicted a 0.4 percent contraction.

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