LONDON, June 26 (Reuters) - Euro zone bond yields fell on Monday as weak German survey data added to doubts about the health of the euro zone economy, after surveys late last week showed faltering business growth and services activity for the bloc.
Europe's bond markets showed little reaction to the aborted insurrection against the Russian state launched by mercenary chief Yevgeny Prigozhin over the weekend, with investors instead focused on European data.
Germany's 10-year bond yield was down 6 basis points (bps) at 2.298% on Monday after the Ifo Institute's German business climate index came in lower than expected in June.
"Sentiment in the German economy has clouded over noticeably," Ifo's president Clemens Fuest said.
The German 10-year yield fell 13 bps on Friday after survey data caused concerns about the health of the euro zone economy. Yields move inversely to prices.
Yields had been pushing higher over the last few weeks as central bankers have raised interest rates and highlighted the threat from inflation. But many investors are increasingly worried that high interest rates will push economies into recession.
One sign of those economic concerns is the deep inversion of Germany's yield curve, with longer-dated yields well below those on shorter-dated debt, suggesting investors think rate cuts are coming.
Germany's 2-year yield was down 4 bps to 3.131% on Monday. The gap between the 10-year yield and the 2-year was at -84 bps, the deepest inversion since September 1992.
European Central Bank policymakers will gather in the hills of Sintra, near Lisbon in Portugal, from Monday for the institution's annual forum.
Investors will be listening closely, with ECB President Christine Lagarde kicking off the event at 1830 GMT.
Other speakers include ECB officials Luis de Guindos, Isabel Schnabel, and Philip Lane.
U.S. Federal Reserve Chair Jerome Powell, Bank of England Governor Andrew Bailey, and Bank of Japan Governor Kazuo Ueda will speak along with Lagarde at a panel on Wednesday.
"Markets will refocus on macro developments and central bank guidance as the tumultuous coup attempt in Russia over the weekend turned out to be short-lived," said Rainer Guntermann, rates strategist at Commerzbank, in a note to clients.
The key data point for European markets this week is the euro zone consumer price index inflation figure, due to be released on Friday.
Italy's 10-year bond yield was last down 6 bps at 3.941%, after a 13 bp fall on Friday.
The gap between German and Italian 10-year yields was little changed at 163 bps.
The spread - a sign of investor confidence in the euro zone's more indebted countries - fell to its lowest since April 1 last week at 150 bps.
Greek bond yields moved along with the broader market on Monday, with little specific reaction to Kyriakos Mitsotakis and his conservative New Democracy party winning a parliamentary election by a landslide on Sunday.
Greece's 10-year yield was down 5 bps at 3.55%.
Mitsotakis has said he'll push ahead with reforms aimed at restoring Greece's investment grade credit rating.
(Reporting by Harry Robertson; Editing by Muralikumar Anantharaman)
