LONDON, Aug 14 (Reuters) - German 10-year bond yields fell to a fresh record low on Thursday after data showed the euro zone’s largest economy contracted more sharply than expected in the second quarter.
The German economy shrank by 0.2 percent between April and June, its first contraction in more than a year as foreign trade and investment weighed on growth. It had been forecast to stagnate, according to a Reuters poll..
The French economy flatlined in the same quarter, undershooting forecasts for growth of 0.1 percent.
German 10-year yields, the benchmark for euro zone borrowing costs, were 1 basis point down at 1.022 percent, an all-time low. French 10-year yields were 1.5 bps lower at 1.42 percent, not far from a record low of 1.399 percent hit last month. (Reporting by Emelia Sithole-Matarise; Editing by Jamie McGeever)