LONDON, March 24 Reuters Germanys 10year bond yield fell to a fiveweek low on Wednesday, a sign of unease that tighter restrictions to contain a fresh wave of COVID19 could hurt the euro zone economy.

Still, IHS Markits flash composite PMI, a closelytracked economic indicator, bounced above the 50 mark separating growth from contraction to 52.5 in March compared to Februarys 48.8, its highest since late 2018.

The news tempered the rally in bond markets but yields were set to end the day lower and prices higher, as a note of caution prevailed.

Much of Europe is suffering a third wave of coronavirus infections and renewed lockdown measures, as well as a slow vaccine rollout, meaning the final reading of the survey and Aprils numbers could be more subdued.

Latest headlines from big euro zone economies such as Germany, which has extended its lockdown to April 18, has encouraged a return to safehaven bonds. European stocks on Wednesday fell to twoweek lows.

Signs of a pickup in the pace of the European Central Banks bond purchases have also supported bond markets.

While Bund yields may struggle to break below the current range the refocus on the domestic pandemic front against a backdrop of increased ECB buying even if only moderately so can contribute to keeping yields lower for now, said Benjamin Schroeder, senior rates strategist at ING.

Germanys 10year Bund yield fell as low as 0.375 on Wednesday, its lowest level in five weeks. It was last down 1 basis point…