By Sunny Oh

U.S. Treasury yields and European bond yields fell sharply on Monday after a raft of eurozone data underlined slowing activity across the region and underscored worries about global growth.

What are Treasurys doing?

The 10-year Treasury note yield slipped 8 basis points to 1.671%, while the 2-year note rate tumbled 7.6 basis points to 1.636%. The 30-year bond yield fell 7.8 basis points to 2.120%. Bond prices move inversely to yields.

What's driving Treasurys?

Investors dived into government bonds following soft economic data that put the spotlight on the eurozone's economic doldrums. The flash eurozone manufacturing purchasing managers index fell to an 83-month low of 45.6 in September, down from 47 in August.

See: Eurozone manufacturing PMI drops in September to worst level in nearly 7 years (http://www.marketwatch.com/story/eurozone-manufacturing-pmi-drops-in-september-to-worst-level-in-nearly-7-years-2019-09-23)

Export powerhouse Germany saw its composite gauge, combining manufacturing and services activity, fall to 49.1. Any reading below 50 reflects a contraction in economy activity and often coincides with the onset of recessions.

Analysts say chances of a recession in the largest economy in the eurozone is rising, after it shrunk in the second quarter of 2019.

The 10-year German government bond yield plunged 7.5 points to negative 0.59%, close to its all-time low of negative 0.72%.

Outgoing European Central Bank President Mario Draghi said monetary policy should "remain highly accommodative for a prolonged period of time," during testimony in front of European Parliament. This comes after (http://www.marketwatch.com/story/ecb-cuts-key-rate-restarts-qe-as-it-attempts-to-revive-eurozone-economy-2019-09-12) the central bank had launched a broad raft of stimulus measures including the resumption of bond purchases beginning from Nov. 1.

What did market participants' say?

"Economic weakness and a new round of stimulus suggest that long rates and [European] government bond yields will see a new leg down and will eventually surpass previous record lows," wrote analysts at Abn Amro.

(END) Dow Jones Newswires

September 23, 2019 11:13 ET (15:13 GMT)