Bund yields hit lowest in over three months after Israel strikes Iran

LONDON, June 13 (Reuters) - German government bond yields fell to their lowest level in over three months on Friday, benefiting from a surge in investor appetite for safe haven assets after Israel launched widescale strikes against Iran.

German 10-year Bund yields fell 4 basis points (bps) to 2.44%, having marked a session low of 2.422%, the lowest since March 3. Yields on the two-year Schatz dropped 1.5 bps to 1.80%.

Longer-dated 30-year German debt performed the strongest, falling 4.5 bps to 2.91%, flattening the curve.

Bund yields were also set for their largest weekly decrease since late March, with a decline of 13 bps.

Euro zone bond prices rose, pushing yields lower, in line with gains in gold and the U.S. dollar.

French 10-year yields fell 2.4 bps to 3.162%, while Italian 10-year yields underperformed, dropping 1.5 bps to 3.40%, but hitting their lowest since December at 3.398%.

On the supply front, Sweden is due to auction new debt.