The euro zone's services economy fell deeper into recession in November than initially thought, adding pressure on the European Central Bank to cut interest rates tomorrow by more than the 50 basis points expected.
A key survey of euro zone companies also showed that inflationary pressures eased in the euro zone's dominant services sector, making it easier for the ECB to cut rates as widely expected.
The Markit Eurozone Purchasing Managers Index for services companies, which covers banks to bars, plunged to 42.5 in November from October's 45.8 level, the lowest in the survey's 10-year history.
That was well below the preliminary flash reading of 43.3 and economists' forecasts and considerably below the 50 mark that divides growth from contraction.
The revisions will bolster those in the market who are forecasting the ECB to cut rates by more than the 50 basis points that most economists predict at its rate-setting meeting on Thursday.
December bund futures hit a new contract high of 124.04 after the data, while yields on ten year bunds fell to 3 per cent. A move below 2.997 per cent would be the lowest in the euro's lifetime. European stocks also extended losses after the data.
"It is quite outstandingly low. There are record lows in all countries apart from Germany, and even Germany was down quite substantially," said Juergen Michels at Citi.
"There is ample room for the ECB to cut rates ... We think 75 basis points will be the compromise, but we would not rule out a cut by 100 basis points," he added.
Earlier data showed services activity sank lower than expected last month in the euro zone's two largest economies of Germany, to 45.1 from 48.3, and in France, to 46.2 from 47.5.
In Germany, some companies reported corporate clients were delaying or cancelling orders because the global financial crisis had left them short of working capital,
Markit said.
All seven sub-indices of the euro zone PMI were revised lower from the flash estimate. That included prices paid for and charged by companies after a month of further steep falls in oil prices.
Official inflation in the euro zone collapsed to 2.1 per cent in November from 3.2 per cent in October, coming close to the ECB's ceiling of close to, but below 2 per cent.
Michels at Citi said there were signs now that inflation was not just diminishing, but it was disappearing.