German Bunds Slump on Firm Economic Data, Rising Oil Prices
The German 10-year bond tumbled on Wednesday amid strong Markit retail sales PMI figure and better than expected industrial production data. The benchmark 10-year bonds yield, which is inversely proportional to bond price rose 6.67 pct to 0.112 pct and 3-year bonds yield jumped 1.47 pct to -0.480 pct at 9:50 GMT.
German industrial output fell less than expected in February after jumping in January, data showed on Wednesday, in a sign that the sector is likely to give Europe's largest economy a modest push in the first quarter of 2016. Output edged down 0.5 pct on the month, data from the Economy Ministry showed. That was well above the mid-range forecast in a Reuters poll for a 1.8 pct decline.
On the other hand, Oil futures bounced off 1-month lows as Kuwait's OPEC governor and two sources said all signs suggested a meeting of oil-producing countries on April 17 would deliver an agreement to freeze output. The Eurozone bonds have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the European Central Bank's target. The International Brent futures rose 2.46 pct to $38.80 at 10:56 GMT.
The ECB has ramped up its asset purchases programme to 80 billion euros a month from 60 billion, with most of the assets being government bonds, which has shrunk borrowing costs across the single currency bloc. Also, Germany sells up to 4 billion euros in 2-year bonds on Wednesday.
Portugal's 10-year yields rose above 3 percent as the country readied for a syndicated sale of 2022 and 2045 bonds. Other euro zone bond markets were mostly unchanged.
Meanwhile, FTSEurofirst 300 is trading higher 0.46 pct at 1294.34 and DAX up 0.05 pct at 9,567.
The material has been provided by InstaForex Company - www.instaforex.com