German 10-year bonds snapped three days of declines as a report today showed the French economy expanded less than initially estimated in the third quarter, stoking demand for the safest assets. Two-year note yields also declined, supporting demand fixed-income securities. France’s gross domestic product grew 0.3 percent in the three months through September, compared with a preliminary estimate of 0.4 percent on Nov. 12, according to the national statistics institute, Insee. The yield on French 10-year bonds fell. “The economic backdrop is likely to keep German bond yields at relatively low levels,” said Andre de Silva, head of Asia-Pacific interest-rate research at HSBC Holdings Plc in Hong Kong. “Even though Germany is doing reasonably well, in the context of the euro zone as a whole, economic growth is going to be fairly subdue, dragged by peripheries.” The bund yield declined seven basis points to 2.96 percent as of 8:23 a.m. in London. The 2.5 percent security maturing in January 2021 rose 0.57, or 5.7 euros per 1,000-euro ($1,322) face amount, to 96.05. German bonds returned 5.8 percent this year, compared with a 5 percent gain of French debt and a 20 percent loss from Greek government securities, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net. Paul Dobson in London at pdobson2@bloomberg.net. To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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