EUROPE - Renewed selling of German bonds could indicate more tough times for the euro-zone, according to Bank of New York Mellon.

The bank's latest data shows that German bonds have registered net outflows for the first time since mid-March. The outflows are of a similar magnitude to those seen in early March, when concerns over the European banking system were at their height.

There have also been continuing outflows from Italian, Spanish, Portuguese, Belgian and Greek bonds.

Simon Derrick, head of currency research, BNY Mellon, highlights a Moody's report from February which argued that the deteriorating economic conditions in emerging Europe would place downward pressure on local banks, which was likely to spill over to their Western parents.

The report said the countries most at risk were Austria, Italy, France, Belgium, Germany and Sweden, which together accounted for 84% of total West European banks' claims on eastern Europe.

Derrick said: "All of this comes at a time when a number of different indicators are flashing warning signals about the state of the recovery elsewhere in the world, such as rumours that Chinese coal buyers are trying to escape from contracts because of high stockpiles, and the slippage in gold prices. In the circumstances it perhaps isn't surprising that we find our incipient euro bearishness continuing to grow."

Meanwhile, a leading actuary has warned pension funds of the effects of the Bank of England's programme of asset purchases, saying schemes should look beyond short-term fluctuations in their deficit calculations, and instead consider the overall health of the scheme sponsor and the longer-term prognosis.

Raj Mody, pensions partner and chief actuary, PricewaterhouseCoopers, says there are two possible outcomes for the Bank's current policy.

"Either quantitative easing will work and employer covenants and cash availability will strengthen, allowing sponsors to better support their pension schemes," said Mody.

"Or the Bank's policy may not work quickly enough, and then in some cases we will see some companies in severe distress. But for scheme trustees to demand heavy short-term deficit financing as a result of artificial distortions in deficit calculations in itself risks that distress becoming reality."

Mody added:  "These day-to-day fluctuations are not helpful for robust decision-making and planning around financing pension schemes. Businesses and trustees should take a longer-term and wider view of their scheme's health, in the context of the overall prospects of their corporate sponsor as a whole."